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- Prices of commercial properties set to head south, study says
Prices of commercial properties across all major Indian cities have raised and are set to fall in the next quarter, say a report by, DTZ India.
The report says that, except Mumbai where demand continues to outpace supply, the market is headed south as supply is expected to overshoot demand.
The report covers seven cities which include New Delhi, Mumbai, Hyderabad, Chennai, Bangalore, Pune and Kolkata.
The report says that in New Delhi overall absorption of commercial space has gone down to 0.81 million sq. ft in the April-June quarter. Growth in rentals has also slowed down to 5-7% in the April-June.
Bangalore saw vacancy levels of around 35% in newer business areas, owing to excess supply.
Hyderabad is likely to see an oversupply as 7.1 million sq. ft is expected to come into the market, while demand is pegged at 4.6 million sq. ft for 2007.
It said that Pune was already reporting high vacancy levels in the newer business districts of Viman Nagar, Kalyani Nagar, Hadpsar and Magrapatta, and rentals remained constant quarter-on-quarter.
Chennai saw a total addition in supply of 3.4 million sq. ft, while only 0.4 million sq. ft was absorbed.
Well, Mumbai is expected to see prices rising as the demand-supply gap in the city are still around 8%. As a result, rentals have increased between 8-16%.
Rents are expected to be high in 2007 and to stabalize only in the first half of 2008.CommentQuote0Flag