News: Commercial Space Transactions Down 10% On-Year In H1 2017: Knight Frank India-06.07.2017

Commercial space transactions down 10% on-year in H1 2017: Knight Frank India

MUMBAI: Commercial real estate transactions across top six property markets in India recorded 10% on-year decline to 18.1 million sq ft in during the first half of 2017. Supply of commercial spaces also declined 5% from a year ago to 17.9 million sq ft, showed a Knight Frank India report.

At 12%, vacancy levels were at the lowest since 2012 when it was 21%. Except for Mumbai and National Capital Region, vacancy levels were low in other cities. Vacancy levels at prime Central Business Districts in Mumbai and NCR are in single digits. The cities observed in the report include Mumbai, Bangalore, NCR, Pune, Chennai and Hyderabad.

“The commercial real estate sector has been the most dependable segment of the overall market. However, some recent geopolitical disruptions in the advanced economies had a bearing on office transactions even as the country continues to grapple with shrinking commercial real estate. But the investment environment is changing and we expect a radical difference in the office landscape on the back of institutional funds foraying into the sector," said Shishir Baijal, CMD, Knight Frank India.

Average rental values across six cities grew at 7% from a year ago during the first half of 2017. While Mumbai saw flat on-year rental growth, Hyderabad and Bengaluruexperienced the strongest rental growth at 14% and 8% on-year, respectively.

Information Technology/IT-enabled Services sector witnessed a fall in share to 39% in first half of 2017 from 43% in the same period a year ago. Co-working space operators show traction with around 0.5 million sq ft taken up across Bengaluru, Pune and NCR during the period.