Sunday, September 15, 2019
News

Office real estate market holds steady while residential remains in doldrums: Knight Frank

   SocialTwist Tell-a-Friend    Print this Page   COMMENT

New Delhi | August 18, 2019 10:41:27 AM IST
While things are not looking up for residential real estate sector, stakeholders remain positive on the office front and expect leasing rates to be on an upward swing in the coming six months.

A survey by consultancy Knight Frank India, Federation of Indian Chambers of Commerce and Industry (FICCI) and National Real Estate Development Council (NARDECO) shows that market sentiment towards new office supply is expected to remain strong.

About 83 per cent of the respondents believe that the second half (July to December) of calendar year 2019 will see new supply additions and continue its momentum in key office markets across the country.

According to Knight Frank Research, office leasing recorded a decadal high of 2.6 million square metres (or 27.4 million square feet) for space transacted in a single period during H1 (January to June) 2019 due to demand from IT/ITeS and co-working spaces.

"Stakeholder outlook with regards future rental appreciation remains upbeat in Q2 (April to June) 2019 with 86 per cent of the stakeholders expecting rents to either remain stable or inch upwards in quality office space in key locations due to limited options," it said.

However, the residential sector remains in doldrums.

"The overall slowdown in economy coupled with factors like the non-banking finance companies (NBFCs) crisis, developer defaults and bankruptcies have slackened the sentiments of sector, especially for residential segment," said the research report.

The situation is further compounded by factors like ongoing liquidity crisis and a diminutive demand scenario. The future sentiment score in Q2 2019 dropped to 52 compared to 63 in the first quarter, suggesting that the industry is exercising caution.

The sentiment score of the developers and the financial institutions significantly plummeted in Q2 2019. Financial institutions have moved into the pessimistic zone at 48 (versus 64 in Q1) while developers were at 52 (versus 64 in Q1). Developers are possibly more optimistic because they anticipate a growing affordable housing business.

About 74 per cent of stakeholders in the survey opined that the economic situation will be the same or may even worsen in the coming six months, showing low confidence in the market situation.

Knight Frank stated that a slowdown in consumption, lower investment and tightening of borrowing ecosystem has further compounded to negativity in outlook. Global rating agencies and multilateral institutions like International Monetary Fund (IMF) and Asian Development Bank (ADB) have lowered India's GDP outlook.

About 53 per cent of the stakeholders in Knight Frank's Real Estate Sentiment Index Q2 2019 opined that the funding scenario may worsen in the next six months with lenders exercising caution in lending to sectors such as real estate, automobile and other consumption-driven sectors. (ANI)

 
  LATEST COMMENTS ()
POST YOUR COMMENT
Comments Not Available
 
POST YOUR COMMENT
 
 
TRENDING TOPICS
 
 
CITY NEWS
MORE CITIES
 
 
 
MORE BUSINESS NEWS
INOX launches third multiplex in Punjab...
Attack at Aramco, trade optimism to boos...
Aadhaar compulsory for new dealers from ...
India to host Dubai-like mega shopping f...
For FM, economic revival has already sta...
'Rs 200 cr minimum capital needed for sm...
More...
 
INDIA WORLD ASIA
NRC: Assam publishes list of included pe...
Delhi BJP chief urges Kejriwal to recons...
Haryana CM Khattar meets Amit Shah in De...
Hindu Sena demands renaming of Babar Roa...
Besieged Sharad Pawar to embark on poll ...
Muslims plan march in support of Ravidas...
More...    
 
 Top Stories
S. Africans and foreigners march ag... 
Delegation of Maldivian civil serva... 
Messi's son converts a penalty, cel... 
This 70-year-old Tamil Nadu Woman s... 
US: 21 injured after multilevel dec... 
North Indian candidates lack qualif... 
Maharashtra: JP Nadda addresses par... 
Considering mutual defence treaty w...