The commercial rentals in the country have not seen vibrancy this quarter as some localities have witnessed rental price correction in Q1-12 when compared to Q1-11. However, the southern part of the country, and some localities in Delhi and Mumbai did see per square feet growth figures over a period of one year. Overall commercial rentals in Mumbai saw 2% increase in commercial rentals, Bangalore saw 3% growth and Delhi de-grew by 7% over the last one year. These are the findings of a study by property portal 99acres.com.
Commenting on the trend Vineet Singh, Business Head, 99acres.com said “As “Clearly the market is range bound now indicating stagnancy in the environment. However, we do continue to see upward price movement in certain localities. In Noida, sectors 1 to 10 has seen some upside in commercial rentals due to availability of diversified sizes and proximity to public transport like the Metro. South Delhi localities like Lajpat Nagar and Greater Kailash are increasingly becoming one of the best choices for commercial renting requirements due to increased connectivity and high density of population.”
A detailed analysis of commercial rental trends of the country shows, most localities in Mumbai saw depreciating rental rates. Kandivali(W) saw maximum price dip in commercial rental rates with PSQF prices dipping from Rs 83 in Q1-11 to 67 in Q1-12. Both Borivali (W) and Lower Parel saw dips of 10 % respectively during the same time period. Most of the other areas like Andheri(W), Malad, Bandra(W), Mulund(W) saw stable rentals indicating not much movement in real estate prices as well.
In Mumbai, Thane is well on its way towards consolidating its position as the new CBD while Goregaon continues to gain traction from Corporates fuelling the increase in rates. Indiranagar in Bangalore and Banjara Hills in Hyderabad have witnessed large residential houses being demolished and re – constructed into commercial complexes which have turned these residential hubs into commercial districts. With up market and premium brands opening shops, these rates are bound to go even higher in future. Commercial rate in Chennai continue to maintain their linear and steady growth,” he adds.
Again in Connaught place, which is a central business district of the National Capital, witnessed minor 4% dips in rentals in Q1-12 when compared to Q1-11. Both, Jasola and Nehru Place saw 11% increase in PSQF rentals during the same time period. Sohna Road and Sushant Lok in the Gurgaon region saw 10% and 5% dips in rentals in Q1-12 over Q1-11, while Udyog Vihar and MG Road witnessed 10% and 6% increase in rentals during the same time period. Barring Sector 18, Noida which saw a minor 5% dip in rentals, all the other localities in Noida saw price appreciation during the last one year.
The southern region of the country has also not witnessed too much positive growth. Areas like Kormangala, Infantry Road and Indira Nagar saw dips of 21%, 9% and 5% respectively in Q1-12 over Q1-11. On the other hand, Jayangar, MG Road and Cunningham Road saw price appreciation within the range of 10% and 14% respectively during the same time period. Banjara Hills in Hyderabad saw 4% growth in prices, while Nungambakkam one of the key commercial hub in Chennai saw 5% dip in rental prices.
Thus on an overall level, the commercial real estate rental market is undergoing a sluggish phase. We may see some improvements in the coming months but this solely depends on the overall sentiment of the real estate sector.
