pre-sale of commercial space in Mumbai - Indian Real Estate Forum

manpreet · 03-07-07

Pre-sale of office properties is becoming popular in Mumbai as developers are selling off properties at bulk rates to raise funds for their development.

Most sales take place before start of construction. Pre-sale constitutes as much as 75 per cent of sale in residential properties, but in contrast, developers always went in for pre-lease agreements for office spaces. This did this because they expected an upside in prices in future.

Mumbai-based Hiranandani Constructions recently pre-sold 1.6 million sq feet commercial and official space in the last four months in its business parks in Powai and Thane, said company MD Niranjan Hiranandani. Explaining the reason for pre-sale of commercial properties, Akshay Kumar, MD of Park Lane Property Advisors, says, "Need for cash and liquidity issues have made developers opt for sale. They want to hold residential properties which are facing a slump in demand and where prices have peaked. To bridge this gap, they are opting for bulk sale of commercial properties."

On the supply side also, Mumbai is the only city among the metros facing a short supply of office space.

Among the seven cities featured in a report by international property consultant DTZ , Mumbai faced a shortage of 8 per cent while other cities like Delhi NCR, Pune, Bangalore, Hyderabad, Kolkata and Chennai faced oversupply of office space.

While 6.4 million sq feet office space was absorbed in Mumbai in 2006, it is expected to absorb 7.5 million sq feet office space in 2007 as against the supply of 6.9 million sq feet in the same year, resulting in supply-demand gap of 0.6 million sq feet.

The city has seen 20-30 per cent hike in lease rentals and similar hike in capital values of these properties in the last 1-2 years.

If the Dharavi development project takes off, the 20 million sq feet commercial development envisaged in the project could give a further impetus to the pre-sales concept.

Source: Business Standard

03-07-07	#1
manpreet New Member Join Date: Oct 2006 Posts: 29 Thanks: 0 Thanked 0 Times in 0 Posts	pre-sale of commercial space in Mumbai Pre-sale of office properties is becoming popular in Mumbai as developers are selling off properties at bulk rates to raise funds for their development. Most sales take place before start of construction. Pre-sale constitutes as much as 75 per cent of sale in residential properties, but in contrast, developers always went in for pre-lease agreements for office spaces. This did this because they expected an upside in prices in future. Mumbai-based Hiranandani Constructions recently pre-sold 1.6 million sq feet commercial and official space in the last four months in its business parks in Powai and Thane, said company MD Niranjan Hiranandani. Explaining the reason for pre-sale of commercial properties, Akshay Kumar, MD of Park Lane Property Advisors, says, "Need for cash and liquidity issues have made developers opt for sale. They want to hold residential properties which are facing a slump in demand and where prices have peaked. To bridge this gap, they are opting for bulk sale of commercial properties." On the supply side also, Mumbai is the only city among the metros facing a short supply of office space. Among the seven cities featured in a report by international property consultant DTZ , Mumbai faced a shortage of 8 per cent while other cities like Delhi NCR, Pune, Bangalore, Hyderabad, Kolkata and Chennai faced oversupply of office space. While 6.4 million sq feet office space was absorbed in Mumbai in 2006, it is expected to absorb 7.5 million sq feet office space in 2007 as against the supply of 6.9 million sq feet in the same year, resulting in supply-demand gap of 0.6 million sq feet. The city has seen 20-30 per cent hike in lease rentals and similar hike in capital values of these properties in the last 1-2 years. If the Dharavi development project takes off, the 20 million sq feet commercial development envisaged in the project could give a further impetus to the pre-sales concept. Source: Business Standard

Thread Tools	Search this Thread
Show Printable Version Email this Page	Search this Thread: Advanced Search

Similar Threads
Thread	Thread Starter	Forum	Replies	Last Post
Delhi Beats Mumbai In Office Space Scarcity	Pinnacle	Delhi	1	05-06-10 01:53 PM
Auction - DDA plot sale draws a blank	gautam	General Real Estate Discussion	0	16-05-07 11:21 AM
High prices impact flats for re-sale	abhi	General Real Estate Discussion	0	07-05-07 10:10 AM
Commercial Space in India	Smantha Sen	General Real Estate Discussion	0	25-01-07 11:58 AM
Stamp duty on property sale to come down	Benz	Indian Property Laws, Disputes, Frauds	1	17-01-07 10:01 AM