By: Anshul Jain, CEO, DTZ India
Sustained demand for SEZ spaces:
With benefits under STPI scheme gone and deadline to fully avail SEZ benefits set for March 2014, demand for SEZ space is expected to witness some momentum in 2012. Delhi-NCR, Bengaluru and Pune are likely to witness an increase in demand for SEZ space from IT/ITeS sector. Developers across these cities have expedited construction of their SEZ projects to meet the deadline of March 2014.
Expansion in banking sector:
Following 2004, when the last new banking licenses were issued, the Reserve Bank of India (RBI) is formulating guidelines for offering new bank licenses. As RBI aims to improve access to banking services, over a dozen corporates are eyeing to enter the lucrative banking sector. As a result, 2012 is likely to witness a further increase in real estate demand from new operators in the banking domain who would look forward to increase their footprints across cities through both front and back offices.
Slowdown in manufacturing sector:
Growth in Indian manufacturing sector has witnessed significant moderation as compared to 2010. While a large domestic market may provide some insulation from slowdown, Slowdown in exports will impact office space demand. As a result, a few sectors like healthcare, logistics, consumer durables etc will exhibit lower than anticipated office space demand.
Improvement in financial availability:
Recent figures by Reserve Bank of India (RBI) on gross deployment of credit by commercial banks indicate some improvement in availability of funds to the sector. Commercial real estate has witnessed a 17% year on year increase in lending in July 2011 as compared to corresponding period in 2010. This will provide a much needed relief to the industry which otherwise has been facing severe constrains in managing cash flows.
