Commercial real estate: Key demand drivers in red-III
In India, investor interest is also seeing a slowdown on account of the lower absorption of new developments and the disparity between investment returns and capital values.
In India, investor interest is also seeing a slowdown on account of the lower absorption of new developments and the disparity between investment returns and capital values.
Market report has it that commercial realty is continuously going into red. A Report by the Royal Institution of Chartered Surveyors (RICS) suggests Indian commercial property market has lost momentum in Q3 with the capital values turning negative for the first time since 2009.
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.
Amidst the turbulence of many of the world’s largest economies, particularly in western markets such as the US and European economies, the broader macro economic outlook in Asia is encouraging.
Global financial uncertainty, shrinking demand, liquidity crunch, repo hike and demand-supply mismatch…all is not well with the commercial real estate in India.
India has the second largest population in the world and is expected to overtake China by 2025. Fulfilling the housing needs of the Indian population which is growing at 1.41% annually is a tremendous challenge for the government today.
As the real estate sector in the country stands at a critical juncture, the performance of this sector will be largely governed by the following drivers.
Economic growth and real estate performance are two significantly intertwined characteristics. It is widely accepted fact that demand for real estate space is drawn and influenced from economic environment.
The Indian realty estate companies reeling under plunging sales and liquidity issues have something more challenging to negotiate-the piling debt in their balance sheet and the banks’ deadline to repay coming close.
The anticipated demand is likely to exert an upward pressure on property prices especially in markets like NCR, Mumbai and Bangalore where the demand-supply gap is high.