Property Times

Delhi NCR : Market sentiment improving - Q1 2014

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The domestic economic environment remained challenging in Q1, with the latest GDP data indicating modest growth rate of 4.7% in Q4. Inflationary pressure, though stabilised, still remained high as do interest rates. However, both fiscal deficit and current account deficit remained within the target range. The Reserve Bank of India (RBI) granted preliminary banking licences to two entities after a year-long application process and indicated that issuance of new banking licences will now be a continuous process.

Office:
Demand for office space in Delhi NCR witnessed a 34% increase over the previous quarter. This primarily constituted relocation demand rather than any significant generation of fresh demand for office space. Although there has been an increase in the number of enquiries by occupiers of office space, the primary objective behind this increase remains renegotiating on existing rentals, especially by corporates occupying large spaces.

Delhi NCR has been amongst those cities in the country that has witnessed a significant rise in project completions in Q1. New supply of 3 million sq ft became operational in Q1 (Figure 1) across eight projects in the PBD region. Office vacancy levels in the city tightened marginally to 31.2%, as demand slightly exceeded new supply. However, average office rents remained stable over the quarter.

Retail:
The on-going uncertainty regarding the regulations for FDI in multi-brand retail will only be clear following the general election result. Consequently foreign retailers, for the main, continue to sit on the sidelines. The exception has been Walmart, which announced its plan to set up 50 ‘cash-and-carry’, or wholesale stores in the next few years to add to its current store count of 20.

No new malls became operational in the city in Q1 and average achievable rents for malls remained stable. Activity was witnessed primarily in malls in the PBD. No significant movement in rentals is expected in the near future, except for a select few malls with a strong catchment.

Source : DTZ (Groupe UGL)

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Mots-clés : DTZ