INDIA: The investment sentiment is seen improving with the new government as cities across India show a growth in office-leasing activity and retail leasing remains stable across the cities’ high streets, according to a report by Jones Lang Lasalle (JLL) (India). Residential demand, however, remains largely sluggish.

“The real estate industry is in an urgent need to reform and speed up the approval process for real estate projects. The reform is likely to benefit the government as well,” the report said.

Steady residential demand is witnessed across Bangalore while a slowing trend and weak new launches are seen across other cities. Demand has picked up in Mumbai for some newly-launched projects with attractive prices, but projects which are under construction continue to experience subdued demand owing to high prices.

“A bungalow located at Malabar Hill in Mumbai was bought at 3.72 billion rupees(RM194 million),” the report said.

Mumbai has seen its office gross leasing volumes increase notably in June while Bangalore has witnessed six new completions. Office rental value in Bangalore is also growing with highest rental value in the central business district ranging from 80 rupees to 130 rupees per sq ft per month.

While retail leasing remains stable across the country, sluggish retail demand is seen in Bangalore and the Delhi National Capital Region. Retailers are preferring high streets, therefore most activity is seen limited to these areas.

Retail rental value has stabilised in Mumbai and Kolkata with the highest rental value at 260 rupees to 390 rupees per sq ft per month and 325 rupees to 400 rupees per sq ft per month respectively. Meanwhile, retail rental value remains stagnant in the other cities. Food and beverage, and apparel brands are still dominating retail leasing in Mumbai.


This article first appeared in The Edge Financial Daily, on August 15, 2014.

 

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