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Commercial Realty Segment to Stabilise further; RICS

Buoyed by strong positive sentiments from the recently announced policy reforms and monetary policy measures, India’s commercial property market is expected to further stabilise and post strong growth in 2015. However, retail sector continues to remain under pressure due to challenges such as lack of quality space and emergence of e-retailing on a large scale. According to the findings of the RICS Commercial Property Monitor, India shows a strong 12 month growth projections for rents and capital values compared with all other emerging countries surveyed.

The RICS Global Commercial Property Monitor tracks the sentiment of RICS members working in real estate and is released quarterly as a guide to the market outlook in selected nations. According to the results, while the tenant demand rose sharply in the office segment, it increased moderately in the retail segment. However, the demand for industrial space fell over the period during October and December, 2014.

Within the investment market, investor demand increased significantly in the office sector, modestly in the retail sector and remained flat in the industrial segment. The supply of property for sale picked up within the office and retail sectors, but was relatively unchanged in the industrial sector.

According to the findings of the survey, credit conditions have been improving since mid last year. The increased investor interest over the period of three months (October- December 2014) will translate into further capital value growth in the country.

“The recent measures of the government to lower the inflation and relax the norms for foreign direct investments in the construction sector have created a strong positive sentiment in the markets. While this would positively impact the markets, liquidity in the sector will gradually improve. This will in the longer run improve the supply of quality commercial real estate in the country,” said Devina Ghildial, Deputy Managing Director, South Asia, RICS.