The commercial property review

The contemporary commercial property market across the country having diversity in the market reports, demand and supply for commercial space as well as rental commercial property also varying from region to region.

“The current status of realty market is not doing well residential as well as commercial property market. However, supply is already huge and demand is not there at all that is why developers have started giving discounts and partly payments, installments etc. schemes to luring buyers. Developers are also attracting to commercial space buyers by offering rebates on several types of duties. Even from last two quarters market has witnessed of less office space transactions,” said Pankaj Kapoor Managing Director at Liases Foras Real Estate Rating & Research Pvt. Ltd.

He also said that, “there is also no demand for rental commercial space in the market so it is virtually come down.”

According to the market research reports demand for office space is less due to the cash component is there, and rentals are least to its bottom. Due to this reason commercial properties as well as rental commercial properties are under pressure and if one is looking at capital values they speculating due to the cash components.

Basic reason is economic scenario people are not hiring much, slowdown in global economy is also one of the reasons for downturn in property market. Due to this less property transactions are happening.

As far as Mumbai is concern it is financial hub and rentals are comparatively higher. So absorption is mostly into IT space. Region is not as bad as other cities several cities are also facing slowdown. Whereas Bangalore is some extent to better situation, Mumbai is in better situation comparatively Delhi, NCR and Chennai are suffering through the worst condition.

Pune is the third most aspiring destination in India but nevertheless it has also facing slow down in the real estate market. Though there is demand is slightly high for IT space in the Central Business District (CBD) of MG Road, Koregaon Park, Bund Garden, Kalyani Nagar, Dhole Patil, FC Road and JM Road and absorption stood at around 57,000 sq ft. Whereas, IT is not fastest to grow earlier period prior to 2006. But overall property market specially commercial property segment is witnessing severe condition except IT space demand is pretty high.

When it comes to Southern regions particularly Bangalore is in quiet better condition still demand is little high for office space and rentals too. Even though, in some part of the city witnessing of new supply in commercial space specially Central Business District (CBD) of MG Road 141,000 sq ft and Extended Business District (EBD) of Indira Nagar approx 0.15million sq ft. Contrary to this Delhi and NCR areas are going through worst condition so far there more than 6000 projects are in ready condition in market and several new office space projects are coming, but there is no demand for it.

“Market for commercial property in the next 12 months in India may seem like ‘The Dirty Picture’ for sellers and ‘Jannat’ for buyers. The price correction that took place in 2011 will continue in 2012 also. However, the interesting opportunities for sellers would be in the areas where there is no supply of vacant spaces and demand is high. This will force the market to shift location and there could be a sudden spurt of new office areas altogether – Like Mini BKC’s and Mini Connaught Places across the country“Mr. Raj Sharma, President & Co-founder, Majestic MRSS’s said.

The industry is betting big on the ‘Retail Industry’ and that too not necessarily in the big cities, it is the Non-Urban Market which will show the most growth.

However, one has to be cautious that the global cues will also have its impact on Indian market and it is not a standalone or protected market. The one thing can be predicted is that in this case, India is bound to beat China over the next 12 months as the Indian commercial property market is not as protected and destabilized.“

The overall conclusion is that there is huge supply across the country in the commercial property market but there is less demand due to economy is not doing well. Whereas, market researchers said that property market will be hiking in the upcoming two to three years.