The Hindu Business Line : Realtors upbeat with higher growth in 2003

THE mood is upbeat in the Indian real estate industry, as analysts feel that the year 2003 has been one of the best ever years. The industry, this year, has reportedly recorded a 30-35 per cent growth, compared with the 20 per cent growth last year.

"This has been the best year since 1994-95, when the market had gone up in terms of price. But the market this year has been much more competitive and there has been a better supply of quality retail and commercial space," said Mr Anshuman Magazine, Managing Director, CB Richard Ellis (CBRE).

While lower bank interest rates and higher income levels lead to a substantial surge in the residential segment across the country, it was the IT and ITES sectors which were clearly the driving force in the commercial segment.

As far as the prices were concerned, the residential segment, according to Mr Magazine, witnessed relatively steady trend, while the prices crashed in the commercial segment due to stiff competition among the various players.

In fact, the southern cities of Bangalore, Hyderabad and Chennai took up close to 70 per cent of the market share in the commercial segment. According to the Cushman and Wakefield annual industry report, Bangalore this year has absorbed close to four million sq.ft. space this year (up by 48 per cent over last year), while Chennai has absorbed close to 1.7 million sq.ft. of space.

Mr Bhaskar Raju, Executive Director, DivyaSree Developers (a Bangalore-based real estate company), said, "Apart from the entry of new players in the BPO and IT segment, a number of existing companies have begun to expand their facilities. The campus culture has taken off in a big way."

Mr M. Balasubramanium, Director of the Chennai-based Mangal Tirth Estate Ltd, which has built the upmarket Spencer's Plaza, attributed this growth to the availability of skilled labour in the southern markets.

Apart from South India, he said that the real-estate market in Kolkata and Pune were also poised for a substantial growth in the forthcoming year.

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