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The residential property segment in the country is seeing a rise in prices, particularly in the luxury segment.
Lack of sustained additions to existing stock and cheap housing loans have driven demand ahead of supply and has created a push in capital values. In some micro-markets such as Gurgaon, the rise is as much as 20-30% over last year.
In commercial property, demand from the IT and IT-enabled sectors (ITES) continues to fuel the real estate market in all the major metros such as Mumbai, Delhi, Chennai and Bangalore.
Suburban locations are the preferred destinations for the new commercial projects on account of easier availability of land, the demand for large floor plates and the demand for build-to-order facilities.
Projecting for the future, a Colliers Jardine property survey says the renewed corporate regeneration has led to falling vacancy rates in central business districts (CBDs); but commercial property rates are unlikely to rise in the next six months. However, residential prices will creep up on account of sustained buying.
According to the report, in Mumbai, commercial rental and capital values have remained stable despite heavy infotech industry demand. Mindspace and other centres in the north-west suburbs command values in the range of Rs 30-40 per sq ft per month while in the Bandra-Kurla Complex, (BKC), the lease rentals are in the Rs 95-110 per sq ft-per month.
With the revival of the diamond bourse and the relocation of several industrial groups in the BKC, the rentals and prices in the business area is likely to see a jump in the near future.
In Delhi, Gurgaon continues to be the focus of development with the lion’s share of fresh development — 1.4 million sq ft or 70% of the new commercial space in the National Capital Region (NCR) — coming up in Gurgaon. Gurgaon’s office space commands rentals in the Rs 35-40 psf per month while in the CBD of Connaught Place it is Rs 85-100 psf per month.
Over the past six months, in Bangalore , the Outer Ring Road has emerged as a new area offering built-to-suit office space. With more than 1.6 million sq ft fresh space coming in the market over the next few months in the area, value of land has shot up upto 30%.
On the residential front, in Delhi , there has been a major spurt in capital and rental values. Increased demand and limited supply in high-end residential areas of South Delhi such as Gold Links, Jorbagh, Panchsheel, West End has increased the rentals by 20% over last year.
Simultaneously, the capital values have gone up by as much as 25% over the last one year. Prices in Gurgaon too have risen sharply by 25-30% despite a constant growth in supply, the Colliers report says.
The study also sees an upward swing in the Bangalore residential market. In the central, high-end areas such as Cunningham Road, Brunton Cross Road, a number of developers are marketing smaller apartments complexes (8-16 units), while the outer suburban areas of Whitefield and Bangarghatta Road are seeing a spectrum of development from row houses and villas to apartment complexes catering to the variety of IT professionals. The report projects about a million sq ft of new space coming into the residential market.
The Chennai residential market similarly has shot up due to increasing land and construction cost. Budget flats averaged Rs 900-1,000 per sq ft, a mid-end apartment in south Chennai is in the range of Rs 2,000-2,500 a sq ft, while a high end luxury apartment at premium locations is currently estimated to cost in the Rs 2,800-3,500 per sq ft range.
Source : The Economic Times
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