Comments
New residential launches have dropped 9 per cent to 1,07,120 in the first half of this year (January-June), compared to 1,17,200 in the same period last year, a report by Knight Frank India said on Monday. This has impacted unsold inventory levels, which have dropped 7 per cent to 6.60 lakh units in the period, against 7.10 lakh units in the corresponding period in 2015.
“The National Capital Region (NCR) has witnessed the sharpest drop in new residential launches at 41 per cent year-on-year, followed by Chennai and Pune at 36 per cent and 32 per cent, respectively,” the report stated.
The ‘India Real Estate Report’ tracks residential and office space trends across key markets in the January-June period.
Interestingly, green shoots of turnaround were seen in the Mumbai Metropolitan Region, which saw new residential launches register 29 per cent year-on-year growth.
“The sector could be at an inflection point with sales in the top six residential markets witnessing 7 per cent growth in the first half of 2016. On the office front, the January-June period has witnessed 12 per cent growth in transaction volume across top six cities,” said Shishir Baijal, Chairman and Managing Director, Knight Frank India.
The first half of the year has seen 19 million sq ft of office space being delivered, compared to 15.8 million sq ft in the same period last year.
Vacancy levels in office space in the top six cities fell marginally, from 17 per cent to less than 15 per cent, the report said.
The office market in NCR saw vacancy levels hover around 20.6 per cent, and new completions were at an all-time low, the report added.
In Bengaluru, the IT/ITeS sector overtook the e-commerce sector in office space absorption.
“The IT/ITeS sector has absorbed 58 per cent of 6 million sq ft of Bengaluru’s office space in the first-half of this calendar year (2016),” Satish BN, Executive Director – South, India Knight Frank India, told BusinessLine .
“The e-commerce sector, led by Amazon and Flipkart, had hogged the limelight by absorbing close to 3.2 million sq ft ulast year (H1 2015), and absorbed around 1.40 lakh square feet this year,” he added.
Space consolidationThe BFSI sector absorbed around 4 per cent of total office space. StandardChartered Bank, which was operating across many locations, has consolidated its operations at RMZ’s EcoWorld in Bengaluru. The manufacturing sector’s share was 7 per cent.
Space absorption by the IT/ITeS sector is mainly to consolidate offices under one roof. This strategy has witnessed many big ticket transactions.
Satish declined to reveal companies which have taken huge spaces along the Outer Ring Road linking Marathahalli and Silk Board junction in Bengaluru.
Bengaluru continued to be one of the best performing markets in the country along with Pune, the Knight Frank India report said.
The city witnessed a 13 per cent increase in new launches and an impressive 18 per cent hike in sales on a YoY basis, said Satish.
The overall weighted average prices continued to scale upwards and saw a YoY appreciation of 3 per cent.
Floods washoutAccording to the Knight Frank India report, Chennai witnessed the lowest transacted volumes in office real estate space since 2013.
Total transacted volume was 1.8 million sq ft during January-June 2016, against 2 million sq ft for the same period last year.
However, vacancy levels have come down from 22.5 per cent in 2015 to 17 per cent in 2016 due to restricted availability of new office real estate and strong demand.
The city saw the addition of only 0.35 million sq ft in the last six months and has a stock of 11.4 million sq ft.
Chennai saw a fall in residential launches with a 36 per cent decrease YoY.
The report said this was due to the floods last year and the clampdown on developmental approvals.
Sales remained steady between January and June 2016 at 8,450 units. For the same time period last year sales were 8,792 units.
The city saw the launch of 5,815 new units in the last six month with south Chennai, one of the hardest hit during the rains, accounting for over half of units. In the corresponding previous year, a total of 9,102 new units came into the market.
Chennai also saw a rise in the launch of premium housing projects.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.