Property Rentals to remain steady in
2015 in India: RICS Survey
National, 24th July 2015:
RICS – a global professional body that promotes standards and chartered
qualification in real estate & construction is expecting real estate sector
in India to remain positive despite mixed economic conditions according to Q2
RICS’ Global Commercial Property Monitor.
Further, the property rentals in 2015
are expected to yield positive growth especially in commercial property. RICS’
Global Commercial Property Monitor is a quarterly guide to the trends in the
commercial property investment and occupier markets.
The Occupier Sentiment Index edged up from 2 to 8 suggesting a slight
improvement in sentiment compared with Q1.This was driven by a further modest
rise in occupier demand over the quarter.At a sector
level, the latest results show offices continue to demonstrate greatest
reslience with the demand indicator running ahead of the leasable space measure
for the sixth successive quarter. This is reflected in rent expectations which
are more upbeat in offices than other sectors.
The Investment Sentiment Indexdid not see
much change over the quarter. Investment enquiries continue to increase and at
a similar pace to the early part of the year. The supply of property for sale
also rose at pretty much the same rate. Despite this, expectations for capital
values remain firmly in positive territory both at the short and medium term
time horizons.
“Growth in investment
demand is being outpaced by that of supply across South Africa, China and
India. Notably amongst the Emerging markets, India is the only
country, which has recorded a marginal positive growth in both Occupier and
Investment community.”said Mr. Sachin Sandhir, Global Managing Director,
Emerging Business, RICS.
“The commercial real estate market in India seems to be
showing signs of improvement. On account of positive capital value
expectations, demand for quality office space seems to be holding ground and
investors seem to be looking at adding stabilized assets to their portfolio. A
careful watch on how much is being absorbed over the coming quarter; will
determine the fate for the rest of the year.” said Ms. DevinaGhildial, Managing
Director, South Asia, RICS.
3 Month Rental
Expectations - Fresh demand to take up space is
running pretty much in-line with new supply but despite this feedback on rents
is still consistent with modest increases.
12 Month Rent
Expectations - Rent projections have also softened
somewhat compared with the preceding quarter and more so looking out over the
next three years. Nevertheless, the feedback is still consistent with higher
rents with prime offices seeing the largest rises.
RICS members around the
world remained positive about the commercial property market even though concerns
persist about the sustainability of the upswing in the global economy.
With the ongoing economic troubles in Russia
& Brazil, the feedback is still very cautious. Going forward, rents and the
capital values are projected to fall but the expectations are not too negative
as compared to Q1 Survey.Meanwhile the strongest Investment Index readings were
returned in Germany, UK and Japan. This was a result of accelerating growth in
investment enquires driving up respondents expectations for near term capital
value gains in the process, each of these markets recorded a firm increase in
occupier demand and supporting upbeat projections of future rental growth.
See annexure for comments from RICS members
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About RICS:
RICS
promotes and enforces the highest professional qualifications and standards in
the development and management of land, real estate, construction and
infrastructure. Our name promises the consistent delivery of standards –
bringing confidence to the markets we serve. We accredit 118,000 professionals
and any individual or firm registered with RICS is subject to our quality
assurance. With offices covering the major political and financial centres of
the world, our market presence means we are ideally placed to influence policy
and embed professional standards. We work at a cross-governmental level,
delivering international standards that will support a safe and vibrant
marketplace in land, real estate, construction and infrastructure, for the
benefit of all.
