Delhi, Bengaluru & Mumbai witness dip in prime residential prices in Q1 2021: Report – ET RealEstate

NEW DELHI: Bengaluru has slipped four positions to rank 40th globally in annual price appreciation of luxury residential properties, according to real estate consultant Knight Frank. In its ‘Prime Global Cities Index Q1 2021’ report, Knight Frank mentioned that New Delhi and Mumbai, too, slipped one spot each to rank at 32nd and 36th, respectively.

In the last report, Delhi was at 31st position, while Mumbai ranked 35th and Bengaluru 36th.

Bengaluru witnessed a fall of 2.7 per cent year-on-year (YoY) in prime residential prices during January-March 2021, leading to a fall in its ranking on the global list.

In New Delhi, the prices fell marginally by 0.2 per cent YoY to an average price of Rs 33,572 per sq ft in Q1 2021.

Mumbai’s prime residential market registered a decline of 1.5 per cent YoY in the January-March quarter with an average price of Rs 63,758 per sq ft.

Prime residential property is defined as the most desirable and most expensive property in a given location, generally defined as the top 5 per cent of each market by value.

The Prime Global Cities Index is a valuation-based index tracking the movement in prime residential prices in local currency across 45+ cities worldwide.

Shenzhen ranked 1st with 18.9 per cent annual change for the period Q1 2020 – Q1 2021.

New York was the weakest performing market and ranked 46th with a fall of 5.8 per cent in prices annually.

Knight Frank India CMD Shishir Baijal said, “The decline in prices of prime residential properties in India during the first quarter of 2021 can be attributed to multiple factors such as uncertainty around the second wave of the pandemic, high liquidity in capital markets, as well as the backlog of supply.”



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Office leasing in seven cities falls 48% in Jan-Mar: Report – ET RealEstate

NEW DELHI: Net leasing of office space fell 48 per cent during January-March across seven cities due to the COVID-19 pandemic, but demand for the flexible space from corporates has increased, according to Cushman & Wakefield.

In its latest quarterly report, property consultant Cushman & Wakefield said the net leasing of office space declined to 35,78,585 sq ft in January-March 2021 from 69,31,922 sq ft in the corresponding period of the previous year across seven major cities.

The flexible space leased by corporate clients increased to 15,523 seats during the first quarter of this calendar year from 10,690 seats in the year-ago period.

“A sharp jump indicates that occupiers are relying on managed space as a smart alternative in the current situation,” it said.

According to the data, the net leasing of office space in Mumbai plunged to 2,01,642 sq ft during January-March 2021, from 8,82,693 sq ft in the corresponding period last year.

In Delhi-NCR, the net office absorption fell to 4,28,469 sq from 15,97,003 sq ft.

The net leasing dropped to 17,24,456 sq ft in Bengaluru from 26,54,939 sq ft.

In Chennai, the demand for office space declined to 1,44,309 sq ft from 2,55,010 sq ft.

The net leasing in Pune, however, increased to 2,76,531 sq ft from 1,73,026 sq ft.

In Hyderabad, the net absorption went down to 6,24,321 sq ft from 8,91,613 sq ft, while Kolkata saw a fall to 1,78,857 sq ft from 4,77,638 sq ft.

Anshul Jain, managing director (SE Asia and India) of Cushman & Wakefield, said, “Since Q4 closed on a positive note for commercial real estate leasing business, the market was hopeful of a gradual return to business as usual. And, the immunisation drive carried out by the government added much-needed confidence.”

Unfortunately, the sudden spike in the number of COVID-19 cases paused the momentum the market had picked up, he said.

“Unless the government rolls out the vaccination drive for one and all, occupiers will continue to remain cautious and market activity is likely to remain muted till the beginning of the second half of 2021,” Jain added.



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Net absorption in office market dips 33% at 5.53 million sq ft in Q1 2021: JLL – ET RealEstate

NEW DELHI: The overall office market in India witnessed a net absorption decrease of 33% in Q1 2021 quarter-on-quarter (Q-o-Q), with 5.53 million sq ft leased during Jan to March 2021, according to a recent report by JLL India.

Bengaluru, Hyderabad and Delhi NCR accounted for nearly 80% of the net absorption during the quarter. Moreover, Bengaluru and Delhi NCR were the two markets which witnessed an increase in net absorption when compared to Q4 2020.

“While 2020 ended on a relatively high note, there was still uncertainty in the market with respect to resumption of business as usual. Occupiers continued to adopt a cautious approach and focused on reassessing their real estate portfolios and long-term commitments. To add to the woes, increasing fears of a spike in COVID-19 cases in the second half of March further pushed the occupiers to press pause again and postpone their real estate decisions,” said Samantak Das, chief economist and head of research & REIS, India, JLL.

“As the vaccination drive is gaining momentum and occupiers remain cautiously optimistic, the year 2021 is expected to witness close to 38 million sq ft of new completions, while net absorption is likely to hover around the 30 million sq ft with a marginal downward bias. This will be at par with the average annual net absorption levels seen during 2016-2018,” he added.

Pre-commitments in new completions played a significant role in driving net absorption. In the first quarter, 31% of the new completions during the quarter was already pre-committed. Maximum pre-commitment levels were observed in the southern markets of Bengaluru (51% of the new completions) and Hyderabad (45% of the new completions).

Interestingly, the larger market of Mumbai saw a massive jump in leasing volume from 0.5 million sq. ft in Q4 2020 to 1.6 million sq ft in Q1 2021. This was majorly driven by select large pre-commitment deals in upcoming spaces within the BFSI space.

Delhi-NCR saw a marginal increase in leasing volumes from 1.9 million sq ft in Q4 2020 to 2 million sq ft in Q1 2021.

New completions during Q1 2021 were recorded at 13.43 million sq ft, a marginal increase of 5% q-o-q. In sync with net absorption, the markets of Bengaluru, Hyderabad and Delhi NCR accounted for nearly 80% of the new completions during the quarter.

On a Y-o-Y basis, new completions across the top seven cities jumped by 56% from the 8.6 million sq ft recorded in Q1 2020. Interestingly, new completions even surpassed the average quarterly levels of about 13 million sq ft witnessed during 2019.

The subdued net absorption levels could not keep pace with new completions. This resulted in overall vacancy increasing from 14.0% in Q4 2020 to 14.9% in Q1 2021.



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Mumbai region, Pune lead housing activity, accounts for 53% sales in top eight cities in Q1 – ET RealEstate

Property markets of Mumbai Metropolitan Region (MMR) and Pune are driving the most housing sales among the country’s top seven cities as indicated by the rising contribution of these markets in total sales led by reduction in stamp duty, discounts and appropriate product strategies of developers.

MMR and Pune accounted for 53% of total sales in top seven Indian cities in the first quarter of 2021 as against 33% in 2013, showed data from Anarock Property Consultants. In a major trend reversal over the last eight years, the once-most active housing sales markets of Delhi-NCR have dropped sharply in their sales share.

Of a total of 58,300 homes sold across the top seven cities in the March quarter, MMR and Pune together accounted for an impressive 53% share, while NCR contributed just 15%. In 2013, of a total of 3.19 lakh units sold across the top 7 cities, the two cities in Maharashtra contributed 33% while NCR comprised the highest share of 37%.

“From 2013 to date, MMR and Pune have been consistently ramping up year-on-year sales share while Delhi-NCR saw a decelerating trend. The major factors aiding these western markets included active implementation of MahaRERA and timely government interventions to boost housing demand. Simultaneously, developers here put in determined efforts to bridge the demand-supply gap,” said Anuj Puri, Chairman – ANAROCK Property Consultants.

In MMR, according to him, developers have managed to bridge the gap by launching affordable homes in new areas like Dombivli and Boisar priced within Rs 45 lakh and most leading developers efficiently changed gears to tap the growing budget housing demand.

“The substantial increase in MMR’s housing sales in the first quarter of 2021 can be credited to measures like reduced stamp duty, an all-time low home loan interest rates at 7 percent, a significant correction in apartment prices, as well as a surge in household savings. These factors seem to have convinced homebuyers that now is the right time for them to invest in real estate. MMR has recorded a lot of pent-up demand in the last seven to eight years and all that demand is now getting converted into sales,” said Aditya Kedia, Managing Director, Transcon Developers.

During this period, there were no major variations in overall housing sales share of the primary southern markets Bengaluru, Hyderabad and Chennai whose contribution stayed relatively between 26% to 35%.

The Delhi-National Capital Region, on the other hand has continued to pay the price of inordinate project delays and unfavourable consumer sentiments, while the southern markets remained end-user driven and thus maintained an even keel, with developers focusing squarely on consumer demand.



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