Given the policy paralysis witnessed during the last two financial year (FY2012-13 and FY2013-14), GDP growth was recorded below 5.0% y/y during both years. Overcapacity in the critical mining and manufacturing sectors reduced the crucial supplies needed by various industries. As a result, a deadly combination of high inflation and falling consumption eventually stunted growth until early 2014. However, since the last two quarters, things have turned around.
In a market still defined by significant lack of transparency, real estate consultancies play a complex and responsibility-driven role in all real estate transactions, especially in the case of high-value property assets. In large ticket sized transactions such as those involved in Grade A office spaces, there can be no margin for error. Transparency, ethics and accurate market information play an inalienable role in closing such deals.
The year 2014 has been quite fruitful for the real estate sector in terms of business sentiment, although the real effect of many of the policies and amendments announced in 2014 will take effect only in 2015. Starting from Union Budget FY2014-15, where affordable housing was considered on par with infrastructure, to relaxation of rigidities in the Land Acquisition and Real Estate Regulatory Bill, India’s new Prime Minister has been offering the India real estate sector consistent doses of energy.
Market pundits have already started begun to forecast 2015 as the best year in the current decade when it comes to real estate absorption. If we apply the thumb rule of every 100 square feet of absorbed commercial space yielding one new job to the net absorption of 40 million square feet of commercial space in 2015, it emerges that the coming year will see the generation of around 400,000 new jobs.
With the economy once again shifting into high gear, all eyes are once more turned to India’s most promising retail markets. Pune is again in sharp focus by retailers because of its continued favourable demographics and generous availability of investment-grade retail space. As we take stock of the city’s retail potential towards the close of 2014, we are seeing a very convincing return of demand for retail spaces in most areas.
The Indian monsoon months are synonymous with low activity in real estate, but this year witnessed considerable amount of activity in the office sector. Compared with last year’s monsoon months of July, August and September (3Q CY 2013), this period in 2014 showed 58% growth in office space demand. A net absorption of 9.3 million sft (or 93 crore sft) of office space during 3Q CY 2014 is a good 1.58 times the same seen in 3Q 2013. This performance for a quarter’s net absorption was bettered only once in the year 2011.