Retail and residential demand continues to remain slow

While there is low demand for retail and residential segments, office space demand as well as rents and capital values remained stable during June

The demand for retail and residential properties across the country continued to remain low during June 2012, says real estate services firm Jones Lang LaSalle (JLL) India. While there is low demand for retail and residential segments, office space demand as well as rents and capital values remained stable, it said in its monthly report.
According to ‘Pulse'’ JLL India's monthly report on real estate, urbanisation along the Delhi-Mumbai Industrial Corridor (DMIC) is expected to merge Ahmedabad, Vadodara and Surat into an important industrial cluster of the country. 
“With 24-hour power supply, special investment regions (SIRs), closely knit all-weather roads and proactive government support, Gujarat has definitely evolved as one of the key industrial investment destinations of India,” the report said.
Ahmedabad, with textile manufacturing traditionally as its major industry, is emerging as an automobile-manufacturing hub with the onset of Tata Nano car plant and investments from Peugeot. Ford and Maruti Suzuki are also planning to invest in the city. Vadodara’s economy is driven by the chemicals, petrochemicals, pharmaceuticals and biotechnology industries while Surat is the world’s diamond city with more than 90% of the world’s diamonds cut and polished there.
“This hub will attract large investments given the business-friendly environment created by the DMIC with support from the Gujarat government. The industrial development will cascade to other real estate developments such as integrated townships. Moreover, improved connectivity will allow easy access to the manpower and land needed for industrial setups,” the report said.
Here are the snippets from the JLL India Pulse…

Office: The Bengaluru office market witnessed stable transaction activity in June. Vacancy rates remained almost stable and there were no new completions in June.
Retail: Demand remained sluggish during June. As no new malls were completed and the leasing activity in current malls remained subdued, the vacancy rate remained stable. Retail rents and capital values continued to remain stable over the month of June. 
Residential: Demand for residential apartments continued to increase marginally in June. Most of the launches were in Electronic City, White Field and Bannerghatta Road. During June, rents and capital values in residential projects witnessed a marginal rise due to the increased demand in select precincts such as Indira Nagar, White Field and Old Madras Road.

Office: Office leasing continued to remain healthy during June. Vacancy decreased as there was no new office space completion and leasing remained healthy. As occupiers continued to shift their operations towards more affordable locations, SBD and suburb locations observed an appreciation of rents and capital values.
Retail: Chennai’s high streets continued to be the preferred destination for retailers. Rents and capital values appreciated during June. With three more malls in advanced stages of completion, the city’s mall market is likely to witness improved activity in the coming months.
Residential: Residential sales improved in June, boosted by the depreciation of the Indian rupee that triggered NRIs to invest in India again. However, property sales continued to remain subdued with respect to end-user sales. A marginal increase in salaries and a persistently tight monetary policy deterred potential home buyers from making purchases. The appreciation of capital values was largely restricted, while rental values continued to soar, indicating high demand for housing.

Office: Office demand witnessed a marginal improvement, but continued to remain largely subdued. Vacancy declined marginally, as supply also remained low. No new office buildings commenced operations during the month. As the activity in this segment remained modest, rents and capital values remained stable, except for a nominal increase in select precincts, which had vacancy in single digits and minimal available leasable space.
Retail: Retail demand remained sluggish in the capital city as prime malls with quality space, had negligible space available for lease. Rents and capital values in malls continued to remain stable over the month of June as demand remained sluggish. Capital values witnessed a marginal increase in the malls in South Delhi sub-market as they had low vacancy.
Residential: Residential sales remained stable across Delhi NCR in the month of June. However, sales were slower compared to the last two months. Rents and capital values remained stable for most of the residential projects in Delhi NCR region, except for a few projects, which commenced operations recently.

Office: Leasing continued to remain stable in the Hyderabad office market. However, most of these leases were space consolidations. There were no new office project completions in June. Rents and capital values mostly remained stable. As leasable SEZ space has been quickly decreasing in the city, developers have increased rents in SEZ properties in Hitec City and Gachibowli.
Retail: Demand for retail space on high streets continued to remain strong during the month. Malls witnessed slow leasing activity while vacancies remained stable as the malls are mostly fully occupied. Rents increased nominally given growing demand at a few high-street locations. Mall rentals remained stable due to less leasable space.
Residential: Residential sales continued to improve in the city, although at a modest pace. Rents increased nominally in a few precincts such as Hitec City and Kukatpally. Capital values remained stable across the city, except for projects that were in their final stages of completion. New launches in the market were priced higher than the average market price.

Office: Demand continued to remain strong, boosted by an increased number of enquiries. Vacancy rates witnessed a marginal dip in June across all sub-markets, barring Rajarhat. Rents and capital values witnessed a marginal upswing in a few sub-markets.
Retail: Demand maintained momentum in the month of June. Vacancy rates in malls dipped marginally. No new malls were completed during the month and malls rents and capital values remained stable due to restrictive activities.
Residential: Demand for residential units remained stable over the month. Rents and capital values witnessed a marginal upswing across most sub-markets in June.  

Office: Office leasing continued to be moderate on the back of stable office space demand in Mumbai during June. Despite there being few new completions during the month, the vacancy rate inched up marginally as compared to previous month’s levels. Moderate pre-commitments in new completions during the month were one of the reasons for this trend. Rents and capital values continued to remain stable in most office buildings in Mumbai. This was largely due to developers encouraging cautious occupiers to execute their real estate plans, amidst uncertain global macro-economic conditions.
Retail: Due to lack of quality malls in the city, retailers’ demands seemed to be polarised towards stand-alone formats, high streets and mixed-use developments. Preleasing activity also rose marginally during the month for the aforementioned reason. Vacancy decreased slightly with no new mall completions in June. There was a borderline increase in rents in the prime retail sub-markets of Mumbai. Capital values also witnessed a revival in some select precincts such as Lower Parel and Malad given a healthy leasing activity in the upcoming malls at these locations.
Residential: Residential sales declined in June primarily in the luxury segment. Select locations in the Navi Mumbai sub-market recorded an increase in rents while the rest of the residential real estate market in Mumbai remained stable. Capital values also remained stable during the month, except in areas such as Kharghar, where they rose marginally.

Office: Demand for office space remained buoyant in June. A majority of transactions were concluded in the eastern part of Pune. Rents and capital values rose in select sub-markets such as Hinjewadi and Hadapsar, which witnessed very low vacancy in most buildings.
Retail: Leasing activity remained sluggish with no major lease transactions being concluded in June. Most existing malls had low vacancy and leasing activity, keeping the rents stable. Low retail activity kept the rental and capital values stable across the sub-markets.
Residential: Demand for residential units remained stable in the month of June. Overall, rents and capital values remained stable. A few projects nearing completion continued to charge premium prices over the other under-construction projects. 




5 years ago

Nice presentation. It would be helpful if we also have the reputed construction/real estate companies providing these services.

Farewell to Lebanon and goodbye to EEPC

The strife between Palestinians and Lebanese resulted in the closure of the EEPC office in Beirut. The 58th and concluding part of a series describing the unknown triumphs and travails of doing international business

The New Year’s Eve in Beirut has always been a great occasion for joyful celebrations to ring in the New Year. As we gathered to chat over the plans in the beginning of December 1974, the atmosphere was tense due to the political conditions in and around the country!


Due to the periodic attacks by the Palestinian fighters, the Israeli Air Force would bombard refugee camps at will. If not for anything else, just to create a fear complex, their planes would rule the sky and raids would be carried, with impunity, on the Lebanese soil.


As a small and peace loving country, Lebanon was helplessly placed. Yes, they had given succour to the Palestinian refugees who had come in thousands; they had permitted them freedom to live, work and remain peaceful. Yet the warring factions among them would wage running battles with a much superior well-equipped army resulting in loss of life and property among civilians, both Palestinians and Lebanese.


The Lebanese government had time and again warned the Palestinians that they were not permitted to roam about fully armed or take law into their own hands while dealing with the Lebanese people. Yet, clashes continued to occur with great loss of life.


I do not know how it happened; but all that we came to know was a bus-load of Lebanese civilians were gunned down in the outskirts of the city. This was the last straw and the fight had spread among the people in the city in various areas. In the next few days, it had deteriorated so much that many parts of the city were under military control. Violence begets violence and the worst clashes began to occur almost daily.


Offices and shops would shutter down at each such outbreaks of violence; schools would close and all that we would hear was the hail of gun-fire, rocket attacks and shrill sirens of ambulances and fire engines.


Meantime, our plans on a vacation had been postponed couple of times and with the uncertain conditions prevailing in the country, I decided to send my family away, promising to join them, at least for a fortnight.


Our office, which we had shifted from Wardieh Square to the Piccadeli Building on Hamra Street, was very much in East Beirut, in the Muslim-controlled area. We must remember that Beirut was always a great cosmopolitan city; yet, when I say Muslim-controlled area, it actually means that the majority of the population was Muslims; properties were owned by them, and many of the residents were Christians and others. They have lived for decades in the area without any enmity and were always hospitable. But when this incident happened, all hell broke loose, and before very long, even the Army had tanks on the road corners in troubled areas.


Appeal for peace came from all the political leaders. Kamal Joumblat, the leader of the Druze community, a Gandhian by choice, also made calls for dropping of arms and for stopping violence. Most foreigners, initially the Westerners, began to leave and embassies began to advice non-essential people to return home. My family also followed suit with some other Indian families. On certain days, Randa was able to come; and on many days Rozine could not because she had to cross from one sector to another before coming to the area! Visitors also stopped and our line of communication was the teleprinter; our HindustanTeleprinter machine was a great workhorse and messages were regularly received and sent.


Nandini Dasgupta had married Charles in a typical Bengali wedding in Calcutta before they had moved to Beirut hardly a year earlier; and now, I was able to accommodate them in my apartment. On the advice of the Ambassador, I left for a brief holiday to be with my family and after two weeks we returned back, only to find that the situation had actually gone much worse than before, something that was not fully reported in the press.   


Hardly three weeks after our return from holidays, we received official intimation from the foreign office through the embassy that women and children should be sent back immediately.


After my family left, I found that hardly ten Indian families i.e. men only holding fort; in fact, they were all preparing to leave permanently. In the next two months, as the fighting spread, I began the official packing of all our office files and records, and ultimately, on the advice of the Council I handed over the office to Ansari, nominated by the Embassy, and returned to Calcutta on 16 December 1975 morning.


I reported to the office on 17th morning and met Kumar, secretary of the Council; Dr Singh, our executive director was in Delhi at that time and I was told that he was operating from there.


As a regular practice, Jagdish (OSD) and Dilip Mohanty (Accounts) and I used to have a Chinese lunch whenever we met, and that day was no exception.  After a wonderful lunch, we returned back to office only to find that there was an ‘official’ letter waiting for me that I had to take by signing the mail register! It contained a directive for Jagdish who was in charge of the Calcutta regional office, to hand over his charge to me, and revert back to his posting as OSD!  Unfortunately, this move by the Council’s management was unknown to me; nor was Jadish aware of such a move. Yet, I could imagine what must have gone through his mind, when he must have opened his letter copy of this directive.


While I love this organization, I could not digest this sudden move. I firmly believe I had done a good job in the Middle East, but I did not expect this reversal of tables with a colleague whom I always liked and respected, and has been guided well. I submitted my resignation a little later, took a carbon copy, walked down to the second floor of the building, where Jagdish was in his regional office, and handed over to him his copy.  He was still holding a copy of the original letter of his transfer, when I handed my resignation copy to him.


Then, I turned around, and asked for a cup of tea. No word was spoken for a couple of minutes. In the end, as I finished the tea, I told him:  “Jagdish, I had no idea about this change. And it is the truth.”


I shook his hands and walked out.


Monsoon covers entire country but still 23% deficient

With improvement in monsoon rains planting of paddy, soyabean and groundnut would pick up, however, scanty rains in Karnataka and Maharashtra might affect coarse cereals

New Delhi: Monsoon, the life-line of Indian agriculture, on Wednesday covered the entire country but the rains are still deficient by 23%, a top official of India Meteorological Department told PTI.


The south-west monsoon had hit Kerala on 5th June but made slow progress affecting sowing of major Kharif crops such as paddy, pulses and coarse cereals.


"Rainfall situation has improved but it is still minus 23%. Monsoon is covering entire country today with parts of Gujarat and Rajasthan receiving heavy rains," IMD Director General LS Rathore told reporters in the capital.


With improvement in monsoon rains, Rathore noted that the planting of paddy, soyabean and groundnut would pick up. He, however, pointed out that scanty rains in Karnataka and Maharashtra might affect coarse cereals.


Rathore was speaking to media after attending a meeting with Agriculture Minister Sharad Pawar and Food Minister KV Thomas to discuss the progress of monsoon.


"Rains will now shift to Himalayas, Terai and north east region. The 23% deficit in rains is likely to continue until next week," Rathore said.


So far, he said that some parts of Karnataka, Punjab, Haryana, Rajasthan, Maharashtra, Gujarat and central Madhya Pradesh have received scanty rains.


India had produced a record 252.56 million tonnes of foodgrains in 2011-12 crop year (July-June) on good moonsoon last year.


Monsoon rains are crucial for agriculture sector, which contributes about 15% to the country's GDP, as only 40% of the total cultivable area is under irrigation



Rajan Alexander

5 years ago

Onset 4 days late; Entire country coverage, 4 days early. By July 3rd week, deficit should be in single digit or near about

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