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.
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.
Will 2011 carry forward gloom in the realty market? That is the question on everybody’s lips today and the sector seems to be only praying that the worst has been left behind in 2011.
One of the biggest problems afflicting the sector is its high level of debt. The debt load of 11 listed real estate companies stands at Rs.38,500 crore.
A Knight Frank report suggests revenues of real estate companies have dropped by 19 per cent and profits have declined by 70 per cent, over the past four financial years, since 2007-08.
In the absence of any serious academic research, the sector in terms of brand presence & cutting edge competitiveness has been lacking, to say the least.