A research produced by DTZ
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 deficits 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.
Kolkata witnessed a 39% improvement in take-up activity for office space in Q1 2014, all of which has been in the PBD region and primarily by IT and Telecommunication companies. New supply of 0.39 million sq ft was completed in the city, divided between the SBD and PBD markets. Although demand was up q-o-q, it was exceeded by the amount of new supply entering the market which resulted in vacancy increasing to 21.9%.
There are active space requirements in the market, but not a comparable number of deal closures. This is expected to improve in H2 2014 with the new government at the Centre.
The city remains a favoured destination for both national and international luxury brands. Malls with good design qualities and catchment populations continue to attract interest from occupiers entering the city or expanding their base. As a result, increased take up was witnessed in such malls with a number of brands making an entry in the city.
No new malls became operational in the city in Q1. Developers remained cautious with plans for new projects. Average achievable rents for malls remained stable due to moderate transaction activity and the trend is expected to continue in the next few quarters.
Source : DTZ (Groupe UGL)