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NB Group and BridgeStreet Global Hospitality partners with three developers

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News Point: Global hospitality major enters Indian market for serviced residences; developers sense big business. 

Real Estate Fund, Delhi NCR real estate, Bangalore Real Estate, JLLI, Jones Lang LaSalle India, Track2Media, Track2Realty, india realty news, india real estate news, real estate news india, realty news india, india property news, property news india, india news, property news, real estate news, indianrealtynews.com, indianrealestateforum.com, Property, Track2Media, Track2Realty, india realty news, india real estate news, real estate news india, realty news india, india property news, property news india, india news, property news, real estate news, indianrealtynews.com, indianrealestateforum.com, Mumbai Real Estate, India PropertyJNB Group and BridgeStreet Global Hospitality have forged partnerships with three Indian real estate developers; IDI, AIPL and CHD.  This collaboration will provide quality assurance, marketing and global sales benefits for guests, developers and investors.

With these new partnerships, JNB and BridgeStreet will be co-branding 183 units of IDI in Noida, 100 units of AIPL in Sector 66A, Gurgaon and 364 BHK units of CHD in Sector 106,Gurgaon.

BridgeStreet has already signed with developers like Silverglades, V Square, Homestead and Logix for 1600 units in Delhi and the National Capital Region of India and will have 500 functional units by the end of 2016.

“We plan to have 5000 fully operational units within five years in pan India, adding to the 50,000 BridgeStreet units worldwide,” said Sean Worker, president and CEO of BridgeStreet Global Hospitality.

JNB and BridgeStreet have been working together in India since 2012.  “This collaboration is key to BridgeStreet’s development of franchise and management opportunities, “ said Sean. “We are working together with JNB to build further investment and development projects in India.”

Elaborating about BridgeStreet’s brands, Worker explained, “Our family of brands includes six-star Exclusive, five-star Residences, four-star Mode Aparthotels and Living, three-star Places and two-star Studyo—offering the convenience of apartment living with a variety of service packages to match guest needs based on location, price point and individual preferences. We are looking to replicate the same experience here in India.”

“We feel that the Indian real estate market is one of huge promise as there is little in terms of supply of serviced apartments.  Increasing demand from IT, consulting, banking, financial and automobile sectors will only create more opportunities. What is required is the right branding, quality assurance and on-time delivery. This will not only lead to price appreciation, but will also ensure growth,” says TJ Barring, President, JNB Group.

“Pure commercial and residential projects won’t do well in the coming years, a hybrid version which supports serviced apartments would have a much higher demand,” says Taran Kaur, Director JNB Group. “The benefits of JNB Group and BridgeStreet are regular rental income,  high occupancy,  fully-furnished apartments with contemporary dĂ©cor, well-equipped kitchens to prepare your own meals, personal service  with 24/7 emergency support, convenient monthly invoice that includes utilities and housekeeping, Internet access and concierge service.”

Affordable luxury—contrasting match or confusing mate?

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Call it contrasting match of the two extreme ends or just the confusing mate living together, but affordable luxury has gained ground in Indian realty, finds Track2Realty.

Real Estate Fund, Delhi NCR real estate, Bangalore Real Estate, JLLI, Jones Lang LaSalle India, Track2Media, Track2Realty, india realty news, india real estate news, real estate news india, realty news india, india property news, property news india, india news, property news, real estate news, indianrealtynews.com, indianrealestateforum.com, Property, Track2Media, Track2Realty, india realty news, india real estate news, real estate news india, realty news india, india property news, property news india, india news, property news, real estate news, indianrealtynews.com, indianrealestateforum.com, Mumbai Real Estate, India Property“Hey you better be clear in mind. You want to go for a luxury apartment or an affordable flat? You cannot get both and are actually getting confused with the two.” Well, most of the Indians would have the same reaction if asked about affordable luxury. Worse even, most of the Indians would rather dismiss it as a marketing gimmick of the developers. However, a few discerning home buyers who are keeping a close track of the emerging trends and concepts in the Indian real estate are today exposed to the fact that affordable luxury too is an emerging reality in the property market.

What was a norm in the tier-II and III cities where the land prices were less, expectations moderate and luxury quotient a way of attracting the residents to switch from plotted developments to apartment culture has today emerged as a project differentiator and USP in many of the periphery locations of the metro cities. Satellite living is thus getting redefined in many of the cities across the country and the buyers are not complaining to travel an extra hour or so if they are compensated with quality living and lifestyle driven homes in exchange.

Explaining the concept Surabhi Arora, Associate Director, Research with Colliers International says that luxury at most times represents one’s ability to use excessive space or an otherwise scarce or expensive resource. Investing in luxury is usually driven by emotional appeal of social esteem. With increasing purchasing power, the concept of luxury is constantly evolving in Indian markets.  She believes the quest for luxury is scaling down the value chain nowadays.

“The demand of luxury projects has been gradually shifting from the social elite to the middle class signifying the huge potential of affordable luxury concept in Indian. To cater this demand developers are coming up with affordable luxury projects which target this growing middle class with increased spending power,” says Arora.

A Harikesh, Senior Vice President, Marketing and Sales, Tata Housing agrees that with the rapid urbanisation and disposable income, the demand for middle income housing is growing rapidly and is all set to expand in the years to come in India. Citing the Cushman & Wakefield report that claims the total new housing demand across India will be nearly 12 million units by 2016, he reminds that the top 8 cities will constitute about 23 percent out of the total demand.

“The growth drivers of this segment are majorly the Millennials. The Millennials are popularly known as Gen Y or Gen Next. This set of consumers is better educated, more tech-savvy and adaptable. They refuse to blindly conform to traditional standards and time honored institutions. With regards to home buying, the Indian Millennials especially newlyweds are forming the modern India as families have double incomes, which is another compelling factor in pushing the purchasing power of this generation. Furthermore, this generation firmly believes in luxury amenities and aspires for a higher standard of living and is therefore creating further demand for affordable luxury,” says Harikesh.

The Cushman & Wakefield report also says that of the total demand in top 8 cities, Middle Income Group (MIG) and Higher Income Group (HIG) categories will constitute majority of the demand at 2.5 million units. Furthermore, the NRI population are also driving this demand for affordable luxury properties in India. According to a survey by Sumansa Exhibitions, the organisers of the Indian Property Show in Dubai, 52.57 per cent of NRIs are looking at settling down in India and want to acquire homes in the mid segment range of Rs. 26-75 lakhs.

Surjit Singh, Marketing President of RNA Corp finds affordable luxury as a bridge between the standard product and the aspiration to the next level, which could be classified as affordable luxury. He asserts that the product is certainly improving in terms of quality, offering and the service.

“To elaborate today developers are focusing on quality aspects of the project, the offering in totality–internal, external and infrastructure and the service. Differentiators are being created along these parameters which may be classified beyond the standard. As far as feasibility of affordable luxury is concerned, the feasibility of any project is a combination of many factors, namely locality, location, project specifics, apartment size & the developers’ credentials,” says Singh.

Rajesh Turakhia, Director, Pashmina Developer endorses the concept of affordable luxury real estate market in India as emerging dynamic segment. He feels with the growing demand for lifestyle living, the new buyers are looking for recreational facilities within their apartment complex. Although there is a rise in the disposable income, a generic mindset is to gain more at a lesser price point. The demand potential for this segment is untapped and massive leading several big brands to enter this segment aggressively.

“Today affordable luxury, is not restricted to only lifestyle living, it extends beyond that to efficiency in planning, minimal wastage of space, and well planned and well fitted apartments coupled with modern amenities. Luxury is no longer associated with large spaces and has translated into a project that offers good planning and set of amenities. If an individual is able to achieve these aspects within the current prevailing market rates or even lower, the project can be termed as an affordable luxurious project,” says Turakhia.

Independent market watchers maintain that India’s housing market is struggling with the dual challenge of slow sales and missing project differentiator. And hence, the quest on part of the developers is to respond to the needs and requirements of the end consumers. It is not uncommon nowadays to see the developers conceptualise a theme with every new project which then gets expanded at every stage of development. It factors in the choice of site architects, planning the project layout, internal planning of the building, construction, and finishing. This approach makes for some of the finest real estate developments.

Moreover, the consumers nowadays are well informed about Indian and global tastes, technologically sound and much flexible in their approach. As the young professionals and well travelled buyers have a very clear idea of what they want, the fringe benefits such as parking space, modular kitchens, swimming pool, gyms, theatre and central air-conditioning is tagged as a necessity; something which was seen as luxury till very recently. This set of home buyers is looking to purchase the dream home which not only reflects the financial but also the social standing of the individual.

The mid segment consumers with global exposure and evolved tastes are today opting for affordable projects with premium facilities. Hence, the real estate developers are coming up with various properties which cater to this segment of buyers. Nevertheless, this segment is still in its nascent stage and will take some time to emerge as a standalone segment within the sector and in the collective consciousness of the buyers. For an outside view, it may continue to baffle for some more time with two seemingly contrasting concepts of affordable and luxury.

High confidence index of MNC office space occupiers challenging trends

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Vigneshwara Developers, Sunil Dahiya, SOHO, Smart Office Home Office, Gurgaon Cyber Greens 2, Delhi NCR real estate, Bangalore Real Estate, JLLM, Jones Lang LaSalle Meghraj, Track2Media, Track2Realty, ravi sinha, india realty news, india real estate news, real estate news india, realty news india, india property news, property news india, KP Singh, DLF, Unitech, Emaar MGF, ndtv.com, ndtv, aajtak, zee news, india news, property news, real estate news, 99acres.com, 99 acres, indianrealtynews.com, indianrealestateforum.comIndiabulls real estate, BSE, Bombay Stock Exchange, Mumbai Real Estate, India Property, Track2Media, Track2Realty, ravi sinha, india realty news, india real estate news, real estate news india, realty news india, india property news, property news india, KP Singh, DLF, Unitech, Emaar MGF, ndtv.com, ndtv, aajtak, zee news, india news, property news, real estate news, 99acres.com, 99 acres, indianrealtynews.com, indianrealestateforum.com, Indiabulls real estate, BSE, Bombay Stock Exchange, Mumbai Real Estate, India PropertyTrack2Realty Exclusive: Sales model in commercial office spaces that was only recently seen as an indicator of distress on part of the developers has, of late, turned out to be a smart business model by the MNCs. These multinational companies seem to have confidence in the Indian growth story and with long term plan they are investing into the purchase of these properties. Track2Realty Focus 2015 finds that it is not a distress sale of developers since the capital values and rental yields have both appreciated sharply in the last three years despite of impending slowdown. The shift of these commercial spaces beyond the IT/ITeS is the most significant trend. 

The multinational companies (MNCs) as occupiers of office spaces across the country are indicating optimism and this high confidence index is actually challenging the way developers used to build and occupiers used to operate. A segment that has traditionally preferred the leased spaces to have asset light model as a business philosophy has suddenly gone into buying the office spaces across the major cities. Beyond this lease model versus the sales model there are also other trends emerging out of the market transactions which indicate that the market is not just entering into next level of experiments but is also bullish on the long term growth prospects in the country.

What is all the more surprising, however, is the fact that the tectonic shift in sales model is not borne out of the slowdown. This may otherwise give the impression that the occupiers’ preference with the office spaces is a result of the developers’ inability to hold and hence distress sale. But that is not the case since none of the major business cities have been witness to the sharp drop in either the capital or rental values of the commercial spaces; it has been rather increasing. Moreover, a significant trend emerging out of the transactions is that the office market is no more driven by the IT/ITsS sector alone.

A Cushman & Wakefield (C&W) report says 43 per cent of office spaces were purchased in India by MNCs since 2012. As per the report, the MNCs are increasingly investing through purchasing offices in India with Rs. 2,470 crores worth office transactions in the last 2 years. There is a seismic shift in the traditional approach of leasing space that such companies have had for years while considering overseas investment. MNCs in the BFSI, ITeS, FMCG & Pharmaceutical sectors are among the lead commercial office buyers in these markets.

According to the C&W report, in 2010, foreign MNCs contributed negligible to the sales of commercial office space. But the report finds that in 2012, 2013 and during the 1st quarter of 2014 foreign MNCs contributed 43 per cent to the total sales value of commercial offices.  

Explaining this Sanjay Dutt, Executive Managing Director, South Asia, Cushman & Wakefield says that the companies that have established operations in India and are confident of their projections and potentials in the country are now tailoring their real estate requirement so that they can be more cost-effective. Companies in specific sectors such as Pharmaceuticals and IT & ITeS are looking to consolidate their research and development divisions with their front-end divisions in a single set-up and are looking for assets to purchase as it proves to be a cost effective strategy for companies.

“There are other factors too, namely the tax implications for US based companies. Another factor compelling especially the US-based companies to switch from ‘Leasing strategy’ to ‘Buying strategy’ is that corporate profits earned outside the US are not subject to federal taxes unless they are brought back to US shores. This makes these companies cash rich and they are able to re-deploying hefty profits earned back in the emerging markets rather than loose the earnings to taxes” says Dutt.

Devina Ghildial, Deputy MD, RICS South Asia also maintains that the trend is significant as it indicates that a number of multinational companies are now establishing their operations in the country and are hopeful of a potential growth of their businesses in India. According to her, from the point of pricing, rates have remained stable all through the one-year period.

“Having understood the trend, companies are now looking to invest and buy instead of taking space on rent. This would give them capital appreciation and will help them gain profits by increased asset pricing. While capital values across commercial real estate are expected to rise in the next 12 months, rental rates in the office segment is expected to be the strongest as compared to other segments such as retail and industrial segments, according to the latest RICS Commercial Survey for the second quarter (April-June), of 2014. With rental rates going up in coming quarters, established companies will stand to gain if they purchase the office they occupy,” says Ghildial.

The C&W report also indicated that majority of the companies investing through purchase are from the BFSI (Banking, Financial Services and Insurance) sector, given their strong presence and long term plans of companies in this sector. The other sectors that have shown keen interest are IT, Pharmaceuticals and Engineering companies. The report deduced that over long-term buying offices always make greater economic sense than renting premises. With the new pro-business government there has been a positive sentiment in the market and this reflects in the volume of buying that has been executed by foreign companies.

Arvind Jain, Managing Director, Pride Group finds the trends very encouraging. He believes many corporates now prefer having an owned office space reflecting on their balance sheets. While the capital expense involved is purchasing commercial space is considerable, this is quickly offset by the savings on rental outgo. We are seeing the trend of MNCs increasingly preferring to buy rather than lease office space reflecting largely in Mumbai. MNCs in cities like Delhi, Bangalore, Pune and Chennai still show more preference to leasing their offices.

“The fact that the share of IT/ITeS is decreasing in office spaces is a god sign that indicates the market is witnessing healthy diversification. A city should not be overly dependent on IT/ITeS in the first place because this sector has shown marked fluctuations over the years. Having a diversified occupier profile indicates that a city is better insulated against downturns. Mumbai and Pune are excellent examples of such healthy diversification in occupiers. BFSI is in any case in a growth mode in India, but there is also more and more absorption by logistics, manufacturing, telecom, biotech and pharma companies,” says Jain.

Maintaining that buying than leasing reflect the confidence of office occupiers in the Indian growth story, Kishor Pate, CMD, Amit Enterprises Housing says it all boils down to how individual MNCs perceive their operations in India. An increasing trend towards buying rather than leasing office space definitely indicates that confidence is high. Confidence in the India growth story is returning in force, and this is one of the many factors that reflect this fact.

There is also the cost benefit in the long term as rents have been increasing every year from 2011 to 2013 in most of the prime markets where MNCs have typically leased office spaces. Though rentals have been more stable this year, there are expectations that they will start increasing from next year. Capital values have also increased moderately during the period. Hence, companies stand to gain financially if they decide to deploy capital to acquire the spaces they occupy.

 

DTZ probe into vacant commercial space in Delhi-NCR: Q4, 2014

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Delhi NCR real estate, Bangalore Real Estate, JLLM, Jones Lang LaSalle Meghraj, Track2Media, Track2Realty, ravi sinha, india realty news, india real estate news, real estate news india, realty news india, india property news, property news india, KP Singh, DLF, Unitech, Emaar MGF, ndtv.com, ndtv, aajtak, zee news, india news, property news, real estate news, 99acres.com, 99 acres, indianrealtynews.com, indianrealestateforum.comIndiabulls real estate, BSE, Bombay Stock Exchange, Mumbai Real Estate, India Property, Track2Media, Track2Realty, ravi sinha, india realty news, india real estate news, real estate news india, realty news india, india property news, property news india, KP Singh, DLF, Unitech, Emaar MGF, ndtv.com, ndtv, aajtak, zee news, india news, property news, real estate news, 99acres.com, 99 acres, indianrealtynews.com, indianrealestateforum.com, Indiabulls real estate, BSE, Bombay Stock Exchange, Mumbai Real Estate, India PropertyTrack2Realty: The Indian real estate market is showing signs of confidence and improved industry momentum post the general elections 2014. The last two quarters clocked an uptick in commercial space take up across leading cities in India. Noticeably, Delhi NCR stood as one of the leading occupiers, registering a significant increase of 25% (y-o-y) in take-up figures during 2014. Moving forth, the demand and corresponding vacancy levels would be key determinants for future traction in the commercial segment across this region.

As witnessed, out of the total 91.4 million sq ft commercial stock in Delhi NCR, the vacancy hovered around 30.5 million sq ft (33% approx.) during Q4 2014. A staggering 32.7% of vacancy was recorded in Gurgaon which witnessed around 7 million sq ft of new supply in 2014. A probe into the vacancy reveals interesting facts around the rental and occupancy position in Gurgaon, the millennium city.

The lower rungs of rental in Gurgaon are located at IMT Manesar and Sohna road with INR 25-50 per sq ft of space available for occupancy. The flip side is towards Golf Course Road and MG Road where rentals are spiking in the range of INR 100-125 per sq ft and above. A midpoint lies around the skirts of Sohna Road, Golf Course Road, and DLF Cyber City where the rentals trend between INR 50-100 per sq ft.

An aggregate of 19 plus million sq ft commercial space remained available for occupiers in Gurgaon during Q4 2014. Despite an upward pressure on rentals at prime locations, more than 13 million sq ft still remained available in the band of INR 25-100 per sq ft. Accounting for more than 55% of total vacant commercial space, 10.6 million sq ft in Gurgaon is now available in the range of INR 25-75 Sq. Ft., which is almost equal to the entire new supply infused in Delhi NCR during the year 2014.

Reassured with investments in infrastructure and increasing demand around its peripheries, Gurgaon is expected to host robust occupancy numbers in the quarters to follow. With the increased demand as witnessed in the last two quarters, the focus is now moving towards Gurgaon’s affordable locales, vouching for promising absorption rates in the year 2015.

The glass is still half full, but there is hope-I

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By: Lalitkumar Jain, Chairman, CREDAI

Lalit Kumar Jain, Kumar Developers, Delhi NCR real estate, Bangalore Real Estate, JLLM, Jones Lang LaSalle Meghraj, Track2Media, Track2Realty, ravi sinha, india realty news, india real estate news, real estate news india, realty news india, india property news, property news india, KP Singh, DLF, Unitech, Emaar MGF, ndtv.com, ndtv, aajtak, zee news, india news, property news, real estate news, 99acres.com, 99 acres, indianrealtynews.com, indianrealestateforum.comIndiabulls real estate, BSE, Bombay Stock Exchange, Mumbai Real Estate, India Property, Track2Media, Track2Realty, ravi sinha, india realty news, india real estate news, real estate news india, realty news india, india property news, property news india, KP Singh, DLF, Unitech, Emaar MGF, ndtv.com, ndtv, aajtak, zee news, india news, property news, real estate news, 99acres.com, 99 acres, indianrealtynews.com, indianrealestateforum.com, Indiabulls real estate, BSE, Bombay Stock Exchange, Mumbai Real Estate, India PropertyTrack2Realty Exclusive: The real estate sector is of strategic economic importance to India, as it is the second largest employment generator after agriculture and contributes about six per cent to India’s GDP. The sector with its backward and forward linkages to 250 ancillary industries has the potential to generate significant employment opportunities and provide a quantum jump to the Indian economy. Accelerating the growth in the sector can help turn-around the sluggish GDP growth witnessed in the last few years.

India would require about 11 crore housing units on a pan India basis by 2022. A demographic trend suggests that India is on the verge of large scale urbanisation over the next few decades. With more than one crore population getting added to urban areas, India’s urban population is expected to reach about 81 crore by 2050. Housing, a basic need for humans, could play an important role in accommodating high urban growth in India.

As per studies conducted by the Ministry of Rural Development and the Ministry of Housing and Urban Poverty Alleviation, it is estimated that almost a quarter of Indian families lack adequate housing facility. Housing in India varies significantly and can reflect the socio-economic mix of its vast population. In the last decade, there has been tremendous growth in the country’s housing sector, along with demographic changes, rise in income, growth in the number of nuclear families, and urbanisation.

Several issues affect the housing market such as absence of an effective policy framework for Economically Weaker Section (EWS) and Lower Income Group (LIG) housing, which is compounded with rising land cost, spiralling construction cost, and inadequate availability and reach of micro-finance measures. Every developer goes through a long gestation period of six to eight years of housing projects, accentuated by multiple approvals to be obtained from multiple authorities in a two to three years time frame.

Contrary to the general perception, developers wish to participate in large scale affordable housing construction; provided the government takes pro-active steps. Currently and in past the respective governments have taken piece meal actions which will not help the sector much. There are reports on record of government appointed committee on affordable housing. Now government needs to act.

Major concerns are lack of coordination between central and state ministries, regulatory reforms with a view to substantially increase the housing development capacity with respect to construction capability, labour availability, construction material, and housing affordability. Inadequate long-term funding across the project life cycle necessitating multiple rounds of funding for the same project has increased the cost of capital and time.

Further, the funding is not available for acquiring of land from banking sources. Rationalize multiple fees and taxes across project a stage which inflates construction cost by 30 to 35 per cent. High rate of migration from rural areas is stressing the limited urban infrastructure; sub-optimal usage of urban land (low FAR/FSI) has resulted in raising the cost per unit of built-up area.

JLL structures joint development agreement for senior living project in Chennai

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Noida Land Deal, Noida Land for 6500 crores, Delhi NCR real estate, Bangalore Real Estate, JLLM, Jones Lang LaSalle Meghraj, Track2Media, Track2Realty, ravi sinha, india realty news, india real estate news, real estate news india, realty news india, india property news, property news india, KP Singh, DLF, Unitech, Emaar MGF, ndtv.com, ndtv, aajtak, zee news, india news, property news, real estate news, 99acres.com, 99 acres, indianrealtynews.com, indianrealestateforum.comIndiabulls real estate, BSE, Bombay Stock Exchange, Mumbai Real Estate, India Property, Track2Media, Track2Realty, ravi sinha, india realty news, india real estate news, real estate news india, realty news india, india property news, property news india, KP Singh, DLF, Unitech, Emaar MGF, ndtv.com, ndtv, aajtak, zee news, india news, property news, real estate news, 99acres.com, 99 acres, indianrealtynews.com, indianrealestateforum.com, Indiabulls real estate, BSE, Bombay Stock Exchange, Mumbai Real Estate, India PropertyTrack2Realty: International property consultancy JLL India has structured an agreement for the development of a Senior Living project in Chennai between Ashiana Housing Limited and Escapade Real Estate. These two firms will enter in Joint Venture development for this project.

Ashiana Housing Limited has ventured into the Chennai real estate market by signing a development agreement (on revenue sharing basis) with Escapade Real Estate (a group company of Arihant Foundations & Housing & JP Morgan) for development of a Senior Living project along with regular group housing and related amenities, across approximately 20 acres.

Manish Kumar, COO – Strategic Consulting, JLL India says, “Ashiana Housing Limited will invest in development and marketing of the approximately 1.0 million sq.ft. project comprising primarily of Senior Living, residential and various support components, while Escapade Real Estate will bring in land as equity into this joint venture. The project is part of a 45-acre township offering luxury villas, group housing and plots.”

The project is strategically located in Maraimalai Nagar, 4 km off GST Road in the vicinity of the 1700-acre Mahindra World City at a 5-minute drive to GST road and 30-minute drive to the city Airport. Prices of various group housing projects in site catchment range between Rs.3500-4000 per sq.ft. Noteworthy projects in the vicinity include Hallmark Infrastructure’s Golden County, Home Dale Villas by ICIPL and Akshaya’sMetropolis. 

The launch of this project once again underscores the increasing importance of the Senior Living segment, whose rapid growth in India offers a superlative opportunity to real estate developers and investors. With increasing life expectancy, lower mortality rates and an overall enhancement of the standard of living in India, senior citizens will increase both in absolute numbers and relative strength, indicating a gradual swing to a senior population.

As per Census of India projections, the share of elders as a percentage of total population in the country will jump from 7.4% in 2001 to 12.4% in 2026 and touch 19.7% in 2050. In 2011, India had about 76 million seniors above the age of 60 years, and this figure is expected to grow to 173 million by 2025, further increasing to about 240 million by 2050. This clearly indicates that the country will witness a quantum leap forward in demand for senior-oriented housing options.

“Over the last five years, there has been a marked increase in the number of senior living projects in India,” says Manish Kumar. “This is a very reliable bellwether of the growing acceptance of and demand for senior living-geared real estate. Geographically, senior living projects are coming up in the suburbs of all key Indian metros, and in traditional retirement destinations such as Coimbatore, Goa and Dehradun. In South India, Chennai offers huge potential for senior living developments. Apart from its strong economy, industrial growth, infrastructural advancement and substantial demographic bas, Chennai also has strong linkages within South Indian hinterlands and offers quality social infrastructure and state-of-the-art healthcare facilities. These factors combine to make it an ideal destination for senior living projects.”

The majority of Senior Living projects in India typically have 50-100 units in the form of residential complexes, with larger ones having over 400 units. The unit typology varies from 1 BHK-3 BHK units, villas and studio apartments. The typical size of these units range from 500 sq. ft. to 2,500 sq. ft. super built-up (saleable) area.  Units are offered under various sale models – outright sale, upfront deposit and lease based mode

Grounded marketing momentum in Coimbatore

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Coimbatore real estate, purvankara developers, Delhi NCR real estate, Bangalore Real Estate, Track2Media, Track2Realty, ravi sinha, india realty news, india real estate news, real estate news india, realty news india, india property news, property news india, ndtv.com, ndtv, aajtak, zee news, india news, property news, real estate news, 99acres.com, 99 acres, indianrealtynews.com, indianrealestateforum.com, Mumbai Real Estate, India PropertyTrack2Realty Exclusive: Property analysts across the country refer Coimbatore as a market where the effects of slowdown is least visible. At a time when the other property markets across the country are reeling under slackening demand among other major worries, Coimbatore is proving to be a market where the property transactions are happening at a decent pace.

An outside view on the Coimbatore property market may find it bucking the trend due to various reasons, like local economy doing well, the proliferating Small & Medium Enterprise (SME) sector, infrastructure upgradation, best climatic conditions of South India and, last but not the least, the expat South Indians investing into Coimbatore property.

However, beyond the fact that the Coimbatore market has favourable socio-economic conditions lies the fact that there has been method in the way property market has been developed in this part of the world. If the real estate market in the city is grounded, it is more by design than by default. The developers in the local market are aware of the fact that the rise and growth of the city property market has to be in sync with the affordability index of the city. And hence, most of the launches are happening at a price point where the local demand exceeds the supply.

Even the developers from other markets across the country who are otherwise selling at a higher price point are maintaining this demand-supply equilibrium in the Coimbatore property market.   As a matter of fact, even the analysis on the triple measurement yardstick of the growth of the given property market—capital appreciation, rental appreciation and property transactions—Coimbatore may not give the fair assessment if only figure is taken into account without understanding the ground realities which are raw facts.

The fact, however, stand that if Coimbatore real estate market have kept the momentum going in favour, it is more by design than by default. While the property markets across the country have been subdued in the last couple of years, the markets across the city have actually bucked the slowdown blues. Yes, the property prices have not appreciated substantially but then the fact that there have been steady transactions at the right price point is enough to justify how the developers have been prudent in this market.

In terms of rental yields also, the markets across the city, both in residential as well as commercial segment, has been flat but occupiers interest has not gone down by any yardstick. Booming economy of the city and the migration of qualified professionals, particularly in the IT & ITeS segment, are cited to be reasons behind this.

Analysts tracking the Coimbatore market are of the view that the developers in this part of the world are grounded in terms of their project offerings as well. As a result, Coimbatore real estate has been flexible in terms of its marketing strategies and also constantly been innovating to keep the momentum going. And that is the reason why Coimbatore real estate seems to be best placed in today’s turbulent times, something that is a traction point for the developers from across the country.

Raj Kuneru, Regional Head, RE/MAX Rest of the Tamil Nadu maintains that Coimbatore is mushrooming as a corporate hub down South, due to which the realty market foresees a tremendous growth in this city. Apart from this the pleasant climatic conditions and many foreign residents settling in this city makes it a very attractive place for real estate due to which this area is shielded from the slowdown traumas.

“People often ask me how far the marketing innovations of the developers been responsible for the success of Coimbatore real estate. My answer to this is that overall innovation by developers has impacted to some extent. It has not changed the landscape of real estate, but in pockets it has improved the lifestyle,” says Kuneru.

A section of analysts insist that it is the state government’s policies that have helped the real estate sector to keep afloat in times of crisis. However, everyone agrees that the government can only provide a fair and conducive market with its policies, but the game changer moves have been made by the developers themselves. Even after the subvention scheme was withdrawn last year, when many of the realty markets across the country felt the heat, Coimbatore real estate market has been resilient. The fundamental reason behind this has been that that it is still the end-user driven market. Speculators and investors by and large avoid such realistic markets where the property appreciation is not a short term trading business.

Some of the prominent developers who have burnt their fingers in the high priced speculative markets are today entering into this market to reinvent themselves and get afloat in a realistic market. Also, many of the national players are not only learning with the grounded attitude of developers in this market, but carrying home a point to explore such marketing methodology in other markets as well.

Following black money expose CBDT orders probe against select real estate firms

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Income Tax Department, Finance Ministry, Government of India, CAG, Comptroller and Auditor General of India, Hasan Ali, Delhi NCR real estate, Bangalore Real Estate, JLLM, Jones Lang LaSalle Meghraj, Track2Media, Track2Realty, ravi sinha, india realty news, india real estate news, real estate news india, realty news india, india property news, property news india, KP Singh, DLF, Unitech, Emaar MGF, ndtv.com, ndtv, aajtak, zee news, india news, property news, real estate news, 99acres.com, 99 acres, indianrealtynews.com, indianrealestateforum.com, Indiabulls real estate, BSE, Bombay Stock Exchange, Mumbai Real Estate, India PropertyTrack2Realty-Agencies: The Central Board of Direct Taxes (CBDT) has ordered an Income Tax department investigation against a number of real estate developers who were recently shown by an investigative portal to be willing to accept alleged black money in property transactions.

The apex authority of the I-T department has asked its investigation units across the country to furnish to it reports of any action or probe conducted against the groups named by the portal in the past and in case such an action has not been done, the CBDT has ordered the same to be initiated.

“The CBDT has asked the investigation units of the I-T department that all these reports should reach it by the first fortnight of December,” a senior official said.

The investigation done by portal Cobrapost.Com included many developers from the national capital region and those from other parts of the country including Mumbai.

While releasing the transcripts and video recordings of its investigation at a press conference here, the portal said that executives from these companies, including some CEOs and CMDs, were ready to accept anywhere between 10-80 per cent of the property value in black money.

These 35 real estate companies under scanner are spread across the national capital, Uttar Pradesh, Haryana, Rajasthan, West Bengal, Andhra Pradesh, Maharashtra and Karnataka.

While some companies had outrightly rejected the allegations that they accept black money in their property transactions, a few others had said that they have already taken action against the concerned executives.

The portal said that most of these executives expressed willingness to accept money abroad through hawala channels, including in Dubai, Bangkok, Singapore and the US.

The findings of this investigation, named ‘Operation Black Ninja’, have come at a time when the government is making all efforts to bring back unaccounted money stashed by Indian citizens abroad.

Cobrapost.Com conducted this sting operation for 18-month-long period across nine states. While releasing the transcripts and video recordings of its investigation at a press conference in New Delhi, the portal said that executives from these companies, including some CEOs and CMDs, were ready to accept anywhere between 10-80 per cent of the property value in black money.

The video clippings, which the portal said were recorded with spy cameras, showed conversations of senior executives from various companies with a person posing as a representative of a ‘prominent politician’, who was looking to convert black money into cash through substantial cash deals.

The findings of this investigation, named ‘Operation Black Ninja’, have come at a time when the government is making all efforts to bring back unaccounted money stashed by its citizens abroad.

Real estate, jewellery and mining major black money generators

Real estate, jewellery and mining are among the main sectors that are generating black money in the country, Parliament was informed.

Minister of State for Finance Jayant Sinha said in a written reply to a query in the Lok Sabha that the Income Tax Department has conducted searches on 273 entities between April-September in the current fiscal.

The total assets seized by the I-T department was Rs 283 crore and undisclosed income was to the tune of Rs 3,371 crore in the first six months till September, he said.

Sectoral analysis in respect of seizures of valuables and admission of undisclosed income during searched conducted by I-T department in the last three finance years indicates that the main sectors are real estate, trading and manufacturing, contractors, service, jewellery and mining, Sinha added.

In 2013-14 fiscal, the I-T department seized assets worth Rs 808 crore and the total undisclosed income was to the tune of Rs 10,792 crore.

In a separate reply, Sinha said that the revenue department has registered 139 cases under the Prevention of Money Laundering Act (PMLA) between January-October. The value of properties attached was Rs 1,911 crore.

For the year 2013, 143 cases were registered under PMLA and Rs 851 crore worth properties were attached.

Colliers International office property market overview report – October 2014 says strong leasing in Bengaluru, Pune, Chennai and Gurgaon

Posted on by Track2Realty

Delhi NCR real estate, Bangalore Real Estate, JLLM, Jones Lang LaSalle Meghraj, Track2Media, Track2Realty, ravi sinha, india realty news, india real estate news, real estate news india, realty news india, india property news, property news india, KP Singh, DLF, Unitech, Emaar MGF, ndtv.com, ndtv, aajtak, zee news, india news, property news, real estate news, 99acres.com, 99 acres, indianrealtynews.com, indianrealestateforum.comIndiabulls real estate, BSE, Bombay Stock Exchange, Mumbai Real Estate, India Property, Track2Media, Track2Realty, ravi sinha, india realty news, india real estate news, real estate news india, realty news india, india property news, property news india, KP Singh, DLF, Unitech, Emaar MGF, ndtv.com, ndtv, aajtak, zee news, india news, property news, real estate news, 99acres.com, 99 acres, indianrealtynews.com, indianrealestateforum.com, Indiabulls real estate, BSE, Bombay Stock Exchange, Mumbai Real Estate, India PropertyTrack2Realty: India’s economic growth accelerated to 5.7 per cent in the April–June quarter, a figure that is much better than the 4.7 per cent in the same quarter of the previous fiscal year. According to various international agencies like International Monetary Fund (IMF), Asian Development Bank and Moody, 2014 is expected to record an economic growth of 5.2% to 5.6% in 2014.

The overall downside risks have receded around the external sector and fiscal deficit, and the business confidence index jumped from 49.9 to 57.4, representing a significant boost in overall business sentiments. The headline WPI inflation moderated to a nearly five-year low of 3.74 per cent in August 2014 from 5.19 per cent in the previous month.

Taking cues from the positive economic sentiments, India’s commercial property sector has been slowly coming back on track supported by increasing business confidence and the improving employment market. However, strong leasing activity in cities such as Bengaluru, Pune, Chennai and Gurgaon has contrasted with the weaker performance of Delhi, Mumbai and Kolkata markets.

During the third quarter of 2014, the total absorption in eight major cities in India has been recorded at 6.7 million sq ft, adding to a total YTD absorption of 23.73 million sq ft which is marginally less than the figure of 25.24 million sq ft for the same period last year.

Grade A office rents remained stable in most Indian markets, with the marginal growth being recorded in Bengaluru, Pune and Gurgaon, where occupier demand has been driven by the thriving technology sector. Bangalore constitutes more than 50% followed by Gurgaon at 14% and Pune at 13%. Robust demand for Grade A office space by technology companies drove this demand across the cities.

Tenants in expansion mode relocated and locked in large office spaces with favourable rates in cities like Bangalore, Pure and Gurgaon. For instance, KPMG and Honeywell pre-committed to approximately 1.6 million sq ft in Bangalore, Accenture pre-committed to around .9 million sq ft in Pune and Samsung took around .5 million sq ft in Gurgaon.

According to Colliers report the market is vigilantly enthusiastic with the new government prospects to bring investors back into the Indian market. The office property market is expected to continue to strengthen for the remainder of 2014. This strong demand will continue in the cities like Pune and Bengaluru for the short to medium term, as evidenced by the large volume of enquiries and RFPs in the currently in the market.

The restoration of business confidence is expected to gain steam, on the back of the positive business outlook. In 2015, overall, property markets are expected to continue to edge further into recovery in India. High vacancy levels in almost all the major markets will keep a check on commercial real estate prices.

Caution leading to lack of large-scale transactions has resulted in a reduction of investment volumes in early 2013 in a number of markets. However, the office market has started improving and will rebound in 2015, with economic conditions stabilising over the course of the year.

Robust expansion leads to 36% increase in office absorption over last year

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Vigneshwara Developers, Sunil Dahiya, SOHO, Smart Office Home Office, Gurgaon Cyber Greens 2, Delhi NCR real estate, Bangalore Real Estate, JLLM, Jones Lang LaSalle Meghraj, Track2Media, Track2Realty, ravi sinha, india realty news, india real estate news, real estate news india, realty news india, india property news, property news india, KP Singh, DLF, Unitech, Emaar MGF, ndtv.com, ndtv, aajtak, zee news, india news, property news, real estate news, 99acres.com, 99 acres, indianrealtynews.com, indianrealestateforum.comIndiabulls real estate, BSE, Bombay Stock Exchange, Mumbai Real Estate, India Property, Track2Media, Track2Realty, ravi sinha, india realty news, india real estate news, real estate news india, realty news india, india property news, property news india, KP Singh, DLF, Unitech, Emaar MGF, ndtv.com, ndtv, aajtak, zee news, india news, property news, real estate news, 99acres.com, 99 acres, indianrealtynews.com, indianrealestateforum.com, Indiabulls real estate, BSE, Bombay Stock Exchange, Mumbai Real Estate, India PropertyTrack2Realty: Net office uptake in the first three quarters (Jan – Sept) of 2014 has seen a significant rise of 36% as compared to same time last year. Total net absorption of office space has been recorded at approximately 24 million square feet (msf) between January – September in 2014 as against the 17.7 msf in same time in 2013, says Cushman & Wakefield in a report.

 NET ABOSRPTION (JAN – SEPT 2014)

City Jan – Sept 2014 Jan – Sept 2013 YTD
Ahmedabad 1,139,100 356,590 219%
Bengaluru 6,191,154 3,225,806 92%
Chennai 2,018,149 1,391,511 45%
Hyderabad 3,873,673 2,100,179 84%
Kolkata 625,576 773,882 -19%
Mumbai 3,620,975 3,572,493 1%
NCR 4,548,030 3,351,656 36%
Pune 2,216,532 2,988,444 -26%
TOTAL 24,233,189 17,760,561 36%

During YTD 2014, Ahmedabad, Bengaluru and Hyderabad witnessed the highest increase in net absorption; Ahmedabad recorded the highest over two – fold increase in net absorption in 2014, albeit on a smaller base. Bangalore witnessed an increase of 92% in net absorption during YTD 2014 over the same period in 2013 and was noted at 6.2 msf.

Hyderabad saw an increase of 84%, recording a net absorption of 3.8 msf.  and continued to outperform Mumbai essentially due to the substantial increase in pre-committed absorption during this period.

On the other hand cities namely Pune and Kolkata office market saw a decline of 26% and 19% y – o – y in total net absorption respectively.

The top performing cities were Bengaluru (6.2 msf) and Delhi-NCR (4.5 msf) and constituted approximately 45% of the total net absorption in YTD 2014. YTD Net absorption in Bengaluru has already exceeded the annual net absorption of 2013 which was recorded at 4.7 msf owing to strong demand from IT-ITeS companies. The leasing activity in NCR was also dominated by IT-ITEs companies with absorption in Q3 contributing more than 50% to its performance.

In the same time, supply across the top 8 cities recorded at 24.8 msf marginally increased by 4% as against YTD 2013. Overall vacancy levels too declined to 18.4% at the end of Q3 2014.

Sanjay Dutt, Executive Managing Director, South Asia, Cushman & Wakefield said, “The office markets have seen a positive trend as the economic growth improved from all-time lows and business confidence strengthened. Companies have started to expand their operations and new leases and expansion now constitute 75% of the leasing activity in the country with relocations and consolidations witnessing a decline over last year. We will continue to see this positive momentum in the next 2-3 years with net absorption likely to outstrip new supply from the year 2016.”

City Overviews

Ahmedabad

Total supply for the first three quarters of 2014 was recorded at 1.7 msf, a substantial increase of 74% compared to same period last year as a number of developments that were deferred in the previous year became operational. Net absorption in the first three quarters of 2014 was noted at 1.1 msf which is more than double the same period last year.

This is owing to new leases and pre-commitments measuring 400,000 sf that were taken up during the said period. Net absorption (in the first three quarters) was concentrated in Gandhinagar (36%), Prahladnagar (35%) and S.G. Highway (26%). Transaction activity in 2014 was primarily driven by the IT-ITeS (49%), BFSI (28%) and manufacturing (13%) sectors.

Although the average transaction size remained similar to last year same period at 12,000-15,000 sf, the increase in number of deals in the IT-ITeS and manufacturing sector led to the increase in net absorption. Other sectors that added to the increase are media and pharmaceuticals. With high levels of supply, vacancy levels increased by 4.6 percentage points to 18.5% at the end of the third quarter. Given the high vacancy levels rentals in most submarkets have largely remained stable over the last year.

Bengaluru

During the first quarter of 2014, 5.5 msf of office space became operational in Bengaluru, all of which belonged to Grade A category and was 19% more than the same period in 2013. 67% of the supply was infused in peripheral submarket, followed by 25% in eastern submarket. Net absorption during YTD 2014 increased by 92% over the same period in 2013 and was noted at 6.2 msf. The IT-ITeS sector continued to dominate absorption; the share in net absorption increased to 76% in the first three quarters of 2014 from 57% in same period last year.

The average size in the IT-ITeS sector also increased by 25% over the same period in 2013 highlighting increasing prominence of IT companies in the city owing to improving economy. Share of BFSI and healthcare companies also increased over last year while consulting, manufacturing and engineering companies noted a decline in transaction activity.

A number of occupiers belonging to IT-ITeS and healthcare sectors relocated to peripheral and eastern submarkets from CBD/Off CBD submarket during the third quarter of 2014. Similar to net absorption, pre-commitments in the first three quarters increased by more than three times in the same period in 2013 and were recorded at 4.3 msf.

Peripheral submarket continued to witness majority of the pre-commitments with 67% share followed by Eastern and Northern submarkets. Despite the high demand, the rental values across most submarkets maintained status quo except CBD/Off CBD submarket where a 17% drop was noticed owing to large scale relocation and increased vacancy levels. Buoyant net absorption reduced vacancy levels by 1.2 percentage points over the previous quarter, which was noted at 12.4%.

Chennai

During YTD 2014, Chennai witnessed new supply of 813,000 square feet (sf) which is 76% lower compared to the same period last year. In the wake of slow recovery in macroeconomic fundamentals, several developers have been witnessing construction delays and have pushed delivery timelines to later periods restricting new supply. CBD witnessed 35% of this total supply, constituting of commercial office space only.

In 2014, corporate houses, mainly in IT-ITeS sector, focused on expansion and consolidation of their operations in the city which resulted in net absorption levels of 2.0 million square feet (msf) which is 45% higher compared to the same period last year. Suburban-Rajiv Gandhi Salai (52%) and CBD (17%) witnessed the majority of net absorption amongst all submarkets. Many relocations and downsizing of operations was rampant in 2013 which resulted in overall all grades net absorption of 1.3 msf, even though total leasing activity was much higher than this year.

Improving demand scenario also led to 50,000 sf IT space being pre-committed in 2014 whereas no pre-commitments were made in the city last year. In the wake of improving demand, mainly from IT-ITeS and telecom sectors, the overall vacancy levels stood at 13.3% at the end of Q3 2014, which is 3.3% lower than the same period in 2013.

The weighted average rentals maintained status quo, though CBD rentals declined by 8% over the last one year as occupiers took advantage of competitive rentals offered by landlords in this submarket in the wake of higher vacancies. 

Delhi- NCR

Delhi-NCR witnessed cumulative supply of approximately 6.6 msf in the first three quarters of 2014, 36% higher than the supply witnessed in the corresponding period last year. The share of Grade A developments in the first three quarters of 2014 has been 99% compared to 81% same time last year as developers continue to align with the requirements of corporate sector. Commercial developments (71%) had the highest share in new supply followed by equal share of IT and IT-SEZs (14% each). At 4.5 msf, net absorption during January-September 2014 also recorded an uptick of 36% compared to same period last year.

While IT-ITeS (56%) continued to have the highest share in demand, engineering & manufacturing along with BFSI sector from last year were overtaken by telecom (9%) and consulting (5%) sector this year. The highest increase in demand was witnessed in the pharmaceutical and healthcare sectors (5.3 times) followed by IT-ITeS (1.24 times) and telecom sector (I.2 times). By the end of Q3 2014, 1.0 msf of space has been pre-committed by IT-ITeS sector in IT-SEZs whereas in the same period last year pre-commitments were primarily observed in commercial developments.

Overall vacancy rate increased by approximately 2.2 percentage point to 26.9% on account of supply outpacing demand. Robust demand led to vacancy levels in Gurgaon CBD submarket nearly halving in Q3 2014 from the levels of Q3 2013 and reaching single digit vacancy levels. The weighted average rentals for the overall city increased by 5.8% compared to the same period last year due to significant supply in Delhi at higher rentals and rentals strengthening in Delhi CBD and in peripheral submarket of Gurgaon.

Hyderabad

During the first three quarter of 2014, Hyderabad witnessed 4.2 msf of new office space, which is 2.6 times of last years’ supply in the same period. The supply majorly constituted the deferred supply from previous years. YTD 2014 witnessed a significant drop in relocation and consolidation activities compared to the same period last year, this coupled with a substantial increase in pre-committed absorption led to 84% increase in this year’s net absorption over the same period last year.

IT-ITeS sector continued to dominate the leasing activity in 2014 with 83% share in YTD 2014 compared to 60% same period last year. In the wake of significant increase in number and size of pre-committed absorption, average deal size in 2014 till date increased by 28% compared to the same period last year and was noted at 18,400 sf. Although the third quarter did not witness any new pre-commitment, the YTD 2014 pre-commitments stood at 768,000 sf entirely contributed by the IT-ITeS sector.

Significant influx of supply pushed the vacancy levels to 18.4%. The weighted average rentals increased by 2.4% compared to the same period last year due to increase in available space quoting higher rentals, transacted rentals however continued to remain stable.

Kolkata

Kolkata witnessed about 489,700 sf of total supply influx during YTD 2014, significantly lower by 68% over the corresponding period a year ago. This was on account of large projects getting deferred to the subsequent year owing to subdued demand and huge availabilities. Around 80% of the supply in YTD 2014 was concentrated and distributed equally in Salt Lake and Park Circus Connector submarkets while during the same period last year Salt Lake witnessed almost half (48%) of the supply and about a quarter (25%) was recorded in Rajarhat submarket.

Demand for office space witnessed a decline and hence net absorption fell by 19% in YTD 2014 compared to the same period last year and was noted at 625,600 sf. This was on account on subdued demand and fewer pre-committed absorptions Salt Lake and Rajarhat submarkets continued to attract majority of the demand with 54% and 29% share respectively in total net absorption.

No fresh pre-commitments were witnessed in both the years owing to huge availabilities. IT-ITeS remained the highest contributor in total net absorption with 42% share, followed by the Banking, Financial Services and Insurance sector (BFSI) with 18% share. The share of both IT-ITeS and BFSI increased from 26% and 10% respectively reported during the same period a year ago on the back of expansion plans. The average deal size in the IT-ITeS sector increased to 19,000 sf in YTD 2014 from 13,400 sf in YTD 2013.

Overall vacancy level was recorded at 27.4%, higher by about 0.9 percentage points on Y-O-Y basis on account subdued demand and few tenants closing their operations thereby creating more availabilities. Weighted average rentals depreciated by 3-4% in Salt Lake and Rajarhat submarkets on account of substantial office stock lying unoccupied and demand continued to remain low.

Mumbai

Overall supply for the first three quarters in 2014 was noted at 3.7 msf, a marginal increase of 2% compared to the same period last year. The share of Grade A developments remained similar around 85-88% during the same period in 2013 and 2014. This year the supply constituted of commercial developments followed by IT Parks (35%) and IT-SEZ’s (15%), compared to previous year where a majority of the developments were IT Parks (61%) followed by commercial developments (28%).  Similar to supply, net absorption also increased marginally by 1% and was recorded at 3.6 msf for the first three quarters of 2014.

Despite healthy transactions in the third quarter, the first half saw lower expansions by companies resulting in marginal increase. The share of IT-ITeS sector in transaction activity declined to 33% in the first three quarters of 2014 from 40% in the same period last year; while contribution by logistics and media sectors slightly increased with companies expanding presence in suburban locations.

Average deal size in the IT-ITeS sector also declined from 50,000 sf in 2013 to 38,000 sf in 2014 and primarily consisted of companies with back office operations. Transaction activity by the BFSI sector largely remained stable with a 15% share in the first three quarters of 2014, similar to the same period last year. Given the continued transaction activity and stable supply, overall vacancy levels declined by 0.8 percentage points to 16.3% at the end of the third quarter.

Average rentals have largely remained stable across most markets except the CBD where rentals have declined 9% since the beginning of 2014 due to subdued demand. Pre-commitments for the first three quarters of 2014 was noted at 730,000 sf similar to the same period last year primarily from companies in the IT-ITeS sector.

Pune

The city witnessed total supply of nearly 1.9 msf in the first three quarters of 2014, witnessing a decline of 42% compared to the same period last year. Total Grade A supply which was noted at 1.1 msf  declined by 63% compared to last year owing to delay in construction schedule which also led to decline in pre-commitments.  The year 2014 till date recorded only 30,000 sf of pre-commitments compared to 332,300 sf during the same period last year. YTD net absorption in 2014 recorded a dip of 26% at 2.2 msf, compared to the same period last year due to subdued demand in the first half of 2014 and higher number of relocations witnessed in the city.

The IT-ITeS and BFSI sectors continued to remain the major demand drivers, though the share of IT-ITeS sectors dipped from 68% in the first three quarters of 2013 to 54% in 2014 same period. However in 2014 till date, BFSI sector’s contribution increased to 26% from 5% as the average transaction size increased to 67,800 sf from 13,100 sf compared to the same period in 2013 owing to a few large deals each exceeding 150,000 sf.

Overall vacancy levels declined by 1.3 percentage and was noted at 24.5% at the end of third quarter. The quoted rentals for most developments remained stable, however weighted average rentals declined across majority of the submarkets due to take up of quality developments quoting relatively higher rentals.

 

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