Real estate spotlight shifts to residential accommodation

Prasanna Upadhyay

Mumbai, Aug 21: There has been a shift in preference towards residential accommodation in Mumbai and Delhi. Research conducted by property consultants show that with the offices moving away from the heart of the cities, the demand for residential accommodation is growing in the suburbs. Cushman & Wakefield has found that suburbanisation of office premises in the two cities has lead to a change in the preference for residential accommodation over the past two years. Central Mumbai areas like Worli, Prabhadevi and Lowel Parel have seen a significant increase in the share of purchase transactions in the first half of the current year. In Delhi, the trend is towards moving to Gurgaon and Noida.

A comparative study by Cushman & Wakefield has shown that the share of residential transactions in Mumbai have risen from 12 per cent in 1999 to 32 per cent in the current year. During the same period, south Mumbai has witnessed a fall in transactions from 27 per cent in 1999 to 12 per cent in the first half of the current year.

According to property experts, the last couple of months has seen an increase in residential lease transactions in Bandra, mostly by multi-national companies and foreign banks.

In Delhi, the trend is marked by a move from independent bungalows to farmhouses since most of the companies have also moved away from the city in search of very large office space. Companies like Nestle, Max New York Life, KPMG, Lucent Technologies, IBM, Hughes Software, Marconi and Xerox have taken up over 1 lakh sq ft space in Gurgaon.

There has been a shift in the demand from independent dwellings units to apartments for reasons such as safety and security. As a result, private developers are developing more apartment complexes rather than independent units.

Also, stagnant prices, buyer friendly home loan options and tax exemption policies have motivated demand to a large extent in the middle-class housing sector, a report by Cushman & Wakefield has stated.

Another property consultant, Knight Frank has predicted that in the long run, there may be a fall in the outright values of residential properties in areas towards the north of the mill lands in central Mumbai, attracting more purchasers.

A Knight Frank report added that with corporates shifting offices to alternate central business districts of Gurgaon and Noida, the demand is increasing in the adjoining areas which leads to lower costs for the companies.