Commercial real estate market in a sweet spot
The commercial real estate market has had a good year with demand outstripping supply. As of now, it is expected that the trend will continue into 2019 and prices will remain steady.
Pankaj Jain, Managing Director at Realistic Realtors, on Commercial Real Estate, shares with Realty Plus his opinion on commercial real estate in 2018 and the outlook for 2019.
“2018, in my opinion was the best year since 2008’s slowdown. Improving demand in Tier – I cities like Hyderabad, Bengaluru, Delhi NCR and Mumbai etc. increased the rentals and capital values between 15% to 30%. Co-working and Business Centerss have been the highlights for surge in demand of office space across India. Slow down in residential real estate also changed the outlook of Institutional investors towards commercial real estate thus the demand of pre-leased properties and good developments projects also surged in 2018.
2019 also looks very promising specially in terms of demand of office space by Multi National Corporations and Co-working organisations. Expected demand figures for 2019 if achieved, will push the rentals upwards and vacancy ratios down in most of the Cities. Grade A and consolidated office space supply will remain low in all Tier – I cities in 2019 and rental rates will continue growing in current economic scenario and infrastructure developments.”
MannuBhasin, Group Director at Realistic Realtors on Retail Real Estate adds, “International brands continue to explore and expand in Indian retail arena along with Indian retail giants – in metros as well as tier 2/3 cities; this clearly indicates robust economy and fast pace development of retail spaces . 2018 has seen increased demand and consumption ( as compared to last few years) due to which upswing in lease rentals to the tune of 10 to 15 % has been observed. This has encouraged retail developers as well as Funds to invest in planed retail spaces and has let to the emergence of new high street pockets.”
Overall launches on the commercial side have had better results than the residential sector. This trend looks to group manifolds in 2019.