Rajender Bhati, General Manager

After a lull, the commercial real estate market in India seems to have improved, following price corrections, lower interest rates and willingness to expand by leading corporate houses. This improvement in office property market is primarily noticed in key business districts in India such as Mumbai, Ahmedabad and National Capital Region (NCR).

According to CB Richard Ellis (CBRE) Asia Market View for the second quarter of 2009, vacancy levels in Noida and Bandra Kurla Complex and Kalina districts in Mumbai were high. There was an increase in the level of enquiries and transaction velocity, with more and more companies willing to explore and evaluate opportunities for buying required office space. This eventually is improving the office space market in New Delhi and Mumbai. However, Ahmedabad registered the lowest vacancy level of 5-6% in the initial months of 2009-10. The report further states that on a whole the commercial realty market in Asia has started showing signs of stability in the second quarter of the current financial year.

Banks, financial services companies and big retailers such as Bharti Retail and Aditya Birla Retail have already reviewed their expansion plans and are keen to invest in the commercial realty market in India. However, sectors such as IT and IT enabled services (ITeS) are still experiencing de-growth and are therefore looking for cheaper options.

To add to this, commercial real estate rental rates are showing signs of recovery in cities such as New Delhi, Mumbai, Bengaluru and Pune. For instance, New Delhi recorded an 8% decline in rates in June 2009-10, which is again half of what it was in the last quarter of 2008-09. Besides, the average decline in commercial rental rates stood at 8.3% in April-June quarter of 2009-10, as against 19% decline in January-March quarter of 2008-09.

Moreover, with India emerging as a preferred hunting ground for global investors, reputed realty developers in India have come up with world-class commercial buildings in major cities to encourage investment. This significant step taken by Indian realty developers has given a new dimension to the country’s commercial realty sector. Apart from this, analysts opine that the IT/ITeS sector, which accounts for around 75% of the total absorption of commercial property in India, is likely to grow by 35-40% over the coming years. This data can be used as a chief benchmark when evaluating the growth of the Indian commercial realty sector.

We at Modern Buildtech, emphasise on client satisfaction, excellent execution and timely delivery. Our professionalism is characterised by quality, innovation and effectiveness that is reflected in both our completed and ongoing commercial projects such as URB Tech Noida, BPTP Next Door Faridabad and Era IT Square, among others.