Cement major Lafarge India has recently set up its new aggregates and concrete (A&C) office division in Bandra East, Mumbai, which is an additional space to the companys existing office which is also based in Nariman Point, according to Lafarge India spokesperson. Recently, the National Stock Exchange (NSE) has chosen Kohinoor City in Kurla for office space, which is strategically located from its main office tower at BKC. According to Atul Modak, head Kohinoor City Project, NSE, along with its group companies has purchased about 80,000 sq ft at Rs 15,000 per sq ft for a total Rs 80 crore. According to sources at JLLM, commercial leasing in Delhi, Gurgaon, Noida, Hyderabad, Chennai, Kolkata, Pune and Bangalore too have started witnessing about 5% to 10% increase in volumes.
According to Rajeev Piramal, executive vice-chairman, Peninsula Land Ltd (PLL), There are signs of revival in the real estate market, especially Mumbai, which is our core market. We hope to see demand pick up further in the second half of the year. Along with the real estate prices, land prices are also getting aligned.
Commercial leasing has picked up by 5% in volume terms in the first quarter of 2009-10, according to real estate consultant Jones Lang LaSalle Meghraj (JLLM). Driving this growth are corporates who are now seeking to set up additional offices that offer them better space at lower costs. However, this is much lower than the 10% to 15% growth the leasing market saw during Q1 of 2008-09 , according to Abhishek Kiran Gupta, head research, JLLM.
According to a recent report from JLLM, The cost arbitrage for those shifting from Nariman Point to BKC and Bandra is more in terms of quality of buildings than in rentals. For those shifting to Goregaon, the cost saving is more than 50%. Currently, the commercial leasing in BKC is an average of between Rs 225 to Rs 350, Bandra East is between Rs 150 to Rs 175 per sq ft and Goregaon is between Rs 70 to Rs 125 per sq ft.
Residential demand too has picked up by 30% to 40% in the affordable segment since March 2009, according to CREDAI. Lalit Kumar Jain, chairman, Kumar Builders and vice-president, CREDAI, told FE, Residential demand is up 30% to 40% in the mid-to-low income segment since March 2009, for residential apartments priced below Rs 30 lakh. This is due to dip in real estate prices by about 30% in certain pockets of the metros, apart from better sense of job security. However, according to Gupta, there is only 5% demand increase in the luxury home segment.
Gupta said, Capital values in many micro-markets have corrected sufficiently to bring homes within the purview of affordability.