Bangalore realty outlook: 2013
This year, the gross domestic product (GDP) growth rate of India has seen a down fall. It is expected that the reforms implemented by the government recently will help improve the real estate market next year.
Over the past two years, the city has witnessed ample launches, which resulted in significant unsold inventory spread across micro markets. The amount of unsold stock will put pressure on the number of launches in the coming year. The residential real estate market will continue to dominate through most of absorption in the mid segment driven by end-users.
Luxury projects might observe stable trends in the capital values given the slowdown in the backdrop of slow economic growth as well as cautious buyer sentiments. The demand will mainly concentrate for residential units in the range of Rs. 6 to Rs. 8.5 million in locations like South East, North and East and the capital value is also expected to witness a rise.
In 2013, it is expected to see a hike in absorption levels in the commercial sector considering the inquiry levels in last quarter of 2012 and anticipated completion of some large projects. Vacancy levels for grade ‘A’ will continue to remain under pressure which will lead to increase the rentals for grade ‘A’ spaces mainly in locations of Outer ring road, North Bangalore and Whitefield. The peripheral locations will continue to be the preferred destinations due to the rapid development of residential complexes, availability of quality space and competitive rental values.
This year also the high street will continue to enjoy healthy rentals. The Bangalore city is going to witness mall supply of nearly a million square feet in Bannerghatta, Tumkur road and Thanisandra road next year; majority of the supply is already pre-committed. The retail sector may not witness any increase in leasing activity in next few years.
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