Development of infrastructure that augments connectivity will push demand for property
In a city that is rapidly growing to cater to the demands of its burgeoning population, infrastructure plays a key role in defining its growth trajectory. With the Union Budget coming in two months' time, it remains to be seen whether the allocation for infrastructure will exceed the Rs 1.73 lakh crores set aside last year (2011-12). In 2011, this increased allocation was a whopping 23.3 percent over 2010-11. A fair percentage of this supported the real estate sector.
Infrastructure includes construction of roads, thrust on housing needs and emphasis on sustained high growth in the GDP. This reflects well for the realty market. In the city, the various development projects are having a tremendous impact on the growth of the property market.
Anurag Mathur, Managing Director, Cushman and Wakefield India, says, "The year 2011 has seen some interesting patterns of growth and improvement over the previous year. However, the subdued sentiment in the second half of the year may appear to be counter intuitive to the continued growth led by the engineering, healthcare and infrastructure sectors. Though the first half of 2011 was witness to dynamic leasing activity, the second half was more restrained. This highlights that the growing domestic need for economic push seem to have had an effect."
Commercial sector
The annual year-end report of the real estate consultant Cushman and Wakefield records an increase of eight percent in the total commercial space absorption over the previous year, at 35.5 million sqft in 2011. On the other hand, there has been a decline of over 20 percent in total supply entering the market in 2011 over last year. This has helped marginally reduce the demand-supply gap in the office market space.
Areas in the city that will see heightened activity in commercial space leasing will be fringes of the Outer Ring Road, towards the international airport and along the Metro Rail corridor.
Residential market
Overall, the macroeconomic conditions will keep investor sentiment steady, both in terms of foreign direct investment (FDI) and foreign institutional investor (FII) inflows. FDI inflows which are currently muted because of the slowdown in the country's GDP growth rate will probably remain stable in the short term. However, as the economy continues to show its resilience in 2012, foreign investors will gain confidence and India will become attractive among competing investment destinations, say analysts.
"Meanwhile, the residential property developers will continue to tackle the current liquidity crunch due to high interest rates. However, as demand improves, improving sales will benefit developers who will focus on execution of their on-going project portfolios," says Ashutosh Limaye, Head-Research and Real Estate Intelligence Service, Jones Lang LaSalle India
Connectivity and infrastructure projects on Kanakapura Road, Bannerghatta Road, Whitefield, Devanahalli and Yashwanthpur will spur demand for residential property along these localities.
Infrastructure includes construction of roads, thrust on housing needs and emphasis on sustained high growth in the GDP. This reflects well for the realty market. In the city, the various development projects are having a tremendous impact on the growth of the property market.
Anurag Mathur, Managing Director, Cushman and Wakefield India, says, "The year 2011 has seen some interesting patterns of growth and improvement over the previous year. However, the subdued sentiment in the second half of the year may appear to be counter intuitive to the continued growth led by the engineering, healthcare and infrastructure sectors. Though the first half of 2011 was witness to dynamic leasing activity, the second half was more restrained. This highlights that the growing domestic need for economic push seem to have had an effect."
Commercial sector
The annual year-end report of the real estate consultant Cushman and Wakefield records an increase of eight percent in the total commercial space absorption over the previous year, at 35.5 million sqft in 2011. On the other hand, there has been a decline of over 20 percent in total supply entering the market in 2011 over last year. This has helped marginally reduce the demand-supply gap in the office market space.
Areas in the city that will see heightened activity in commercial space leasing will be fringes of the Outer Ring Road, towards the international airport and along the Metro Rail corridor.
Residential market
Overall, the macroeconomic conditions will keep investor sentiment steady, both in terms of foreign direct investment (FDI) and foreign institutional investor (FII) inflows. FDI inflows which are currently muted because of the slowdown in the country's GDP growth rate will probably remain stable in the short term. However, as the economy continues to show its resilience in 2012, foreign investors will gain confidence and India will become attractive among competing investment destinations, say analysts.
"Meanwhile, the residential property developers will continue to tackle the current liquidity crunch due to high interest rates. However, as demand improves, improving sales will benefit developers who will focus on execution of their on-going project portfolios," says Ashutosh Limaye, Head-Research and Real Estate Intelligence Service, Jones Lang LaSalle India
Connectivity and infrastructure projects on Kanakapura Road, Bannerghatta Road, Whitefield, Devanahalli and Yashwanthpur will spur demand for residential property along these localities.
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