Commercial Real Estate Market Recovery
Major office markets in India will revive by mid 2010 with increased interest from tenants and a downward correction in rentals taking place, according to latest research. The real estate markets of India breathed a sigh of relief with visible signs of recovery towards the third quarter of 2009. The research reviews the last twelve months performance of commercial real estate markets in Delhi NCR, Mumbai, Bengaluru, Kolkata, Pune and Chennai against its estimates of 12 months ago and predicts that the markets is on the the recovery path . According to research the pace and scale of market recovery will be led by the Tier 1 cities such as Delhi NCR, Mumbai and Bengaluru. Tier 2 cities such as Kolkata and Chennai will see a gradual recovery in the later part of 2010 while the Pune market is unlikely to see any major changes. After correcting between 25 to 40 per cent across almost all markets over the last year, rentals are now getting support at the development cost level in some markets. No further significant price correction is expected for the next six months. Experts says IT-ITES will continue to drive the absorption volume. The Telecom sector is expected to be another significant demand driver over the next 12 months whereas the banking, financial services, insurance and manufacturing sectors will drive local market dynamics for some cities. It is only after peak vacancy is attained that a price revival can be expected. Total market revival is likely to be achieved by mid 2010.