IT, retail trade prop up property market in Q3

The residential market of suburban Mumbai and Delhi experienced high levels of leasing and sale activity, especially in mid to high-end apartments that ranged between Rs 25 lakh and Rs 50 lakh. However, in Bangalore sales were concentrated towards plots. Since a lot of residential projects were completed this quarter, the abundant supply of apartments was able to control the rise in the rental and capital values in the quarter, for the residential markets of Delhi, Chennai and Bangalore.

Chennai and Bangalore have seen huge absorption of commercial space and ‘ready space rates’ are now up by 10 to 15 per cent in these cities. While the 1.2 million sq ft Tidel Park in Chennai was fully occupied in a record 12 months, Bangalore is witnessing a shortage of large blocks of ‘ready space’ – a remarkable turnaround for a city where there was a glut only 12 months ago.With the IT industry starting to make a bigger move in Maharashtra, ready space availability in Mumbai has become critical and prices are expected to move up 10 to 12 per cent in the coming 12 months. Also, suburban prices in Mumbai are competing with Bangalore and Chennai city rates.

Though Delhi has adequate commercial space, the city is seeing a high concentration of retail coming into it, with two more malls being planned.

Mumbai, Delhi and Bangalore saw increased leasing activity in the suburbs. Low vacancy rates of seven to nine per cent in Nariman Point and Cuffe Parade had a positive effect on the suburban commercial market in Mumbai. Vacancy rates of Bangalore CBD were their lowest ever, with a maximum of four per cent due to shortage of quality office space in that city. However, inChennai A grade supply exceeded demand, and vacancy rates were around 26 per cent. The new supply coming in all the metros by next year is expected to be high as a result of the market revival sensed by the developers. The third quarter of 2000 was eventful with the ICE (information, communication and entertainment) sector opening many offices across the metros. Capital sales in Chennai and Bangalore in the IT sector were higher in comparison to Mumbai and Delhi in the period, said the report.