Mumbai, July 29, 2015: Knight Frank India today launched the third edition of its flagship half yearly report - India Real Estate. It presents a comprehensive analysis of the residential and office market performance of the Mumbai Metropolitan Region for the period between January–June 2015 (H1 2015).
· Housing market still under pressure; H1 2015 witnesses a 47% drop in new launches
· Nearly two lakh unsold homes in Mumbai; Sales continue its downhill ride
· Launches plummet by nearly 70%, while demand dives 30% over the last 2 years
· Confusion over Mumbai’s new Development Plan 2034 impacts approvals for new projects
· Airport on the anvil, will prices in Navi Mumbai take flight? Currently commands prices in the range of INR 4,500 to 15,000/sq ft
MMR Residential market trend:-
· Mumbai maintains its pace of 2014; records office space transaction of 2.5 mn sq ft in H1 2015
· IT/ITeS find greener pastures across Bengaluru, Hyderabad, Chennai and Pune; State’s new IT/ITeS policy – unlikely to be the game changer
· Improved east-west connectivity owing to the metro and the SCLR will drive office demand in H2 2015 across Ghatkopar, Andheri, Versova among others
· Banks, Manufacturing & Media consulting continue being the anchor for MMR’s office market; Office absorption is forecasted at 5.8 mn sq ft in H2 2015 - an increase of 20% compared to H2 2014.
New completions and absorption:-
Speaking about the findings, Dr. Samantak Das, Chief Economist & National Director - Research, Knight Frank Indiasaid, “Despite delayed reforms in the economy and concerns across the globe, the Indian economy is doing reasonably well with basic fundamentals showing a strong foothold. This has had a positive impact on the office market that did see a turnaround in 2014 and the pace continues in 2015. Although Mumbai holds a mixed portfolio of occupiers, media consulting, ecommerce and manufacturing sectors are showing a perceptible positive traction. Going forward, we expect Mumbai to clock office transactions of 7.7 million sq ft during 2015. Residential market on the other hand is still reeling under tremendous pressure with drastic drop in new launches at the back of falling demand. The recovery of the residential market does not seem eminent until 2015 and we expect sales to be in the range of 63, 000 units which is marginally below the 2014 levels.”
Adding on the office market findings, Viral Desai, National Director, Office Transactions, Knight Frank India, said, “Mumbai developers have begun showing interest towardscommercialdevelopments which was not the case in the last 2-3 years. Two reasons for this, firstly office space has shown robust growth in demand on the back of improved economicsentiments and second, with the residential market slowing down,developers foresee the office market to be more lucrative. Although valuations within the office market are lower as compared to the residential space, the demand however, is a sustained one. Additionally, supply of Grade-A office spaces have reduced which may lead to a marginal increase in rents across select locations. This will also lead to a resultant increase in the demand of Built to suit office spaces.Going forward, I expectabsorption to clock 5.8 mn sq ft – an increase of 20% compared to H2 2014.”
About Knight Frank:-
Knight Frank is the leading independent global property consultancy. Headquartered in London, Knight Frank and its New York-based global partner, Newmark Grubb Knight Frank, operate from 370 offices, in 55 countries, across six continents. More than 12,000 professionals handle in excess of US$1 trillion (£643 billion) worth of commercial, agricultural and residential real estate annually, advising clients ranging from individual owners and buyers to major developers, investors and corporate tenants.
In India, Knight Frank is headquartered in Mumbai and has more than 1000 experts across Bangalore, Delhi, Pune, Hyderabad, Chennai, Kolkata and Ahmedabad. Backed by strong research and analytics our experts work with clients to offer a comprehensive range of real estate services across advisory, valuation and consulting; transactions (residential, commercial, retail, hospitality, land, capitals); facilities management; and project management.
For more information, visit www.knightfrank.com