By AT Bureau
New Delhi, 27 Sep, 2011: The commercial rentals in the country have not seen vibrancy this quarter as some localities have witnessed rental price correction in Q3-11 when compared to Q3-10. However, the southern part of the country, and some localities in Delhi and Mumbai did see per square feet growth figures over a period of one year.
Commenting on the same Vineet Singh, Business head, 99acres.com said “As clearly the market is range bound now indicating stagnancy in the environment. However, we do continue to see upward price movement in certain localities. In Noida, sectors 1 to 10 has seen some upside in commercial rentals due to availability of diversified sizes and proximity to public transport like the Metro. South Delhi localities like Lajpat Nagar are increasingly becoming one of the best choices for commercial renting requirements due to increased connectivity and high density of population. In Mumbai, Lower Parel is well on its way towards consolidating its position as the new CBD while Goregaon continues to gain traction from Corporates fuelling the increase in rates. Indiranagar in Bangalore and Banjara Hills in Hyderabad have witnessed large residential houses being demolished and re – constructed into commercial complexes which have turned these residential hubs into commercial districts. With up market and premium brands opening shops, these rates are bound to go even higher in future. Commercial rate in Chennai continue to maintain their linear and steady growth.”
A detailed analysis of commercial rental trends of the country shows that Connaught place, which is a central business district of the National Capital, witnessed stable rentals in Q3-11 when compared to Q3-10. Jasola and Saket saw 6% and 25% dips in PSQF rentals during the same time period. On the other hand prime localities of South Delhi like Karol Bagh, Greater Kailash, Nehru Place and Lajpatnagar saw rentals appreciate within the range of 14% and 25% in Q3-11 over Q3-10. In Mumbai, Bandra(W) and Borivali(W) saw maximum depreciation in rentals with PSQF prices dipping by 34% and 10% respectively in Q3-11 over Q3-10. Andheri(E), Goregaon(E) and Lower Parel saw commercial rentals move up by 28%, 27% and 22% respectively during the same time period.
The southern region of the country has seen a movements in the commercial rental market with top localities in Chennai like Nungambakkam and T-Nagar (North) witnessing an 18%, and 14% upward movement in rentals respectively in Q3-11 over Q3-10.The up market localities of Kormangala in Bangalore (South) and Banjara Hills in Hyderabad also saw rentals move upwards by 4% and 28% respectively when we compare per square feet prices of Q3-11 over Q3-10.
With increased connectivity, the NCR regions of Delhi and Navi Mumbai have also developed as key commercial hubs of the country. Although some localities of Noida and Gurgaon have seen an appreciation in prices, Vashi in Navi Mumbai and Ghaziabad region saw rental prices dip by 8% and 14% respectively during the same time period.
Thus on an overall level, the commercial real estate rental market is undergoing a sluggish phase. We may see some improvements in the coming months but this solely depends on the overall sentiment of the real estate sector.