Pricing is the key, when it comes to residential spaces and whether rain or shine there is always demand for a rightly priced residential space. Fewer amenities and higher prices never work favorably, forcing developers to offer discounts on the projects.
Experts at IKIA feel that with the strengthening of economy, there is bound to be more demand for residential space. As India makes strong strides on the path of development, interest in real estate investment is going to increase steeply over the coming years. Economic growth will result in a growing urban population and developers who continue to launch projects will benefit in the long run, even if the current market is slow. Ill-chosen locations with amenities that drive costs up may well be the reason for the current non demand.
Office spaces on the other hand, recorded 40 million sq ft of absorption of space in the top 8 cities in 2014. Office space segment will see a strong demand in the next quarters. Demand drivers are information technology, banking and financial sectors and e-commerce sector. Consolidation of office spaces by companies is a trend in major cities, resulting in leasing of large office spaces, and developers looking at making bigger floor plates.
Most of the new supply released during the quarter was concentrated in Gurgaon in Delhi national capital region, outer ring road, Whitefield and Hebbal in Bengaluru; IT corridor/extended IT corridor in Hyderabad; Airport Road, Kharadi, and Pashan in Pune; and Thoraipakkam/ Sholinganallur in Chennai.
Demand for smaller office spaces is growing fast as well, with thousands of start-ups mushrooming in cities such as Bengaluru, Pune and Mumbai.
Experts are expecting that leasing numbers in 2015 will cross the recorded ones in 2014.