MUMBAI, November 19: While residential transactions have shown an improvement in the last three months, property prices would not show a shift either way in coming months, noted property consultants Knight Frank have reported in their quarterly review released last week.Commercial deals which are marked more by rentals than outright sales will continue to be bleak, as most of the potential buyers were adopting a wait-and-watch policy, the report has predicted. With corporates shifting base from South Mumbai to North in places like Andheri-Kurla Road and Bandra-Kurla complex, there is a vast oversupply of office spaces in South Mumbai, which is further pushing rates down.A grim economy with no signs of improvement, a climbing inflation rate, pending issues like repealment of the Urban Land Ceiling Act and a possible modification of the Rent Control Act seem to be conspiring to put a downward pressure on prices. To make a way out, the city has been witnessing a steady rise in the leave and licensecategory, where a large chunk of demand has been from foreign banks, MNCs and Indian corporates.The good news, though, is that prices of areas like Bandra are fast catching up with those of South Mumbai, which continue to stagnate between Rs 17,000 to Rs 22,000 per sq feet. ``Previously on an average an A-grade apartment in South Mumbai was approximately 200 per cent more expensive than a corresponding flat on Pali Hill, Bandra. Today the difference is not more than 50 to 60 per cent,'' says the report.In the past few months, an apartment in NCPA Apartments, Nariman Point, was sold at Rs 16,000 per sq ft, while another at Carmichael Road was sold at Rs 19,000 sq ft. Correspondingly, two flats on Pali Hill were sold for Rs 14,000 per sq feet, while another on Carter Road was sold at Rs 15,000 per sq ft.The political uncertainty in the country is apparently forcing multinational companies to enter into leave and license agreements, with a large number of middle-level executives making a beeline forrented properties in and around South Mumbai and places in the North, like Bandra and Versova.Corporates, meanwhile, are shifting away from South Mumbai to areas of Central and suburban Mumbai. Around 1.5 million sq ft of land is available for sale or lease in Central Mumbai, which includes textile mill land. Around 2.5 million sq ft are available in suburbs. These conditions of oversupply, says the report, have further pushed down prices for commercial areas in the last quarter.Developments for office spaces are most in Bandra-Kurla complex, where prices range from Rs 6,000 to Rs 10,000 per sq ft and Rs 3,500 to Rs 6,500 per sq ft on Andheri-Kurla road. One of the drawbacks of the Bandra-Kurla complex, though, that the report has mentioned is in terms of accessibility by road due to traffic congestion during peak hours.The overall outlook for the property scene, especially in the commercial category, is considered to be bleak, with buyers delaying investment and opting for rentals.
