Net Office Space Leasing Drops 44% in Delhi NCR During 2015

New Delhi: Net office space absorption fell sharply by 44 per cent in Delhi-NCR during last year to 3.83 million sq ft as leasing transactions largely pertained to relocation, consolidation and renewals of spaces.

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According to property consultant Cushman & Wakefield, the total office space leasing increased by 2 per cent in the Delhi-NCR in 2015 at 7.76 million sq ft, but incremental absorption of space by the corporates declined.

In 2014, total office space leasing stood at 7.63 million sq ft, out of which net absorption was 6.81 million sq ft.

"While the incremental space absorption in 2015 saw a decline of 44 per cent in 2015 over the previous year, the leasing activities recorded a marginal increase of 2 per cent in the same period, indicating that a larger proportion of office space leasing activities concentrated on relocation, consolidation or renewals," C&W said in a report.

Of the total leasing, approximately 50 per cent was attributed to relocation, consolidation and renewals, it said, adding that the first and the fourth quarter, in particular, witnessed low net absorption levels in Delhi-NCR region.

Meanwhile, the total office space leasing in the eight major cities --Delhi-NCR, Mumbai, Chennai, Kolkata, Bengaluru, Ahmedabad, Hyderabad and Pune -- went up by 15 per cent to 50.9 million sq ft during last year from 44.38 million sq ft in calendar year 2014.

Net absorption of office space dropped marginally by one per cent in these eight cities in 2015 at 33.91 million sq ft from 33.47 million sq ft during the previous year.

Apart from Delhi-NCR, net absorption of office space fell in Ahmedabad and Mumbai at 59 per cent and 30 per cent, respectively, during 2015 compared with the previous year.

The other five cities recorded positive net absorption of office space, with Pune witnessing the maximum incremental rise of 61 per cent in leasing activities at 6.24 million sq ft during 2015.

Real estate market, particularly housing segment, is facing a huge slowdown in last 3-4 years, leading to multi-year delays in project deliveries. However, office segment, of late, has picked up, being reflected in increase in leasing activities.

Source - NDTV 

Property Prices Soften by 1% in Delhi NCR: Report

New Delhi: Property prices fell by an average one per cent in the Delhi-NCR during October-December period compared with the previous quarter on higher supply, according to a report by property portal 99acres.com.

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Average capital values in Noida, Greater Noida and Delhi dipped minimally by 1 per cent each. Gurgaon's housing market emerged as the worst hit zone with a drop of 2 per cent in property prices in the last quarter of 2015 over the preceding one, the 99acres.com report said.

While the demand-supply mismatch has long been impacting Delhi NCR's real estate sector, factors such as delay in completion of infra projects further worsened the situation.

The portal said that popular realty hubs such as Gurgaon and Noida continued suffering on account of unsold inventory, but Greater Noida stayed strong on availability of affordable homes and proximity to office space.

Commenting on the report, Narasimha Jayakumar, chief business officer, 99acres.com, said, "Although Delhi NCR has a grim real estate story to narrate at present, the lethargy will be dispelled as soon as the market bottoms out."

The developers have already begun purchasing land parcels to build their inventory and are entering into JVs to improve liquidity, awaiting the opportune moment to launch projects when homebuyers re-enter the market, he added.

On outlook, the portal said that the Cabinet's approval of 20 amendments in the Real Estate (Regulation and Development) Bill may boost project deliveries and promote organised growth of the sector.

Source - NDTV

Delhi eyes new realty on 12,000 acres

The Haryana government on October 27 claimed its recently unveiled New Integrated Licencing Policy would help create two lakh dwelling units belonging to the economically weaker section in major urban growth centres such as Gurgaon, Faridabad, Sohna, Sonepat, Panipat and Panchkula in the next five to six years.

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State government officials are also confident of achieving this mammoth target by 2020 once the policy gets takers and people start applying for licences for real estate projects. This is because under this policy, private developers that would get licences to build housing complexes and projects would have to transfer 12 per cent of their land free of cost for building EWS and no-profit-no-loss (NPNL) housing units.

"We are expecting to receive applications for getting licence for about 12,000 acres under this policy. So, going by the formula we will get about 1,200 acres of land for building EWS and NPNL housing units in these cities," said additional chief secretary P Raghavendra Rao, who is in charge of the town and country planning department.

However, the policy specifies that no single pocket proposed to be transferred under this category will be less than 2.5 acres to ensure proper planning and implementation of such complexes. It will be up to the government to utilize the land parcels through any public or private agency, the policy says.

It also specifies that the licences need to hand over another 10 per cent of their project area to the government free of cost to government for community facilities such as schools, dispensaries, community centres, post offices and religious centres.

The policy has also introduced the provision for transfer of development rights (TDR) for the land owners.

"These certificates will contain the entitlement of FAR, which the individual land owner will be able to transfer to a developer/ colonizer subsequently, a policy mentions. The builder will be allowed to utilize the TDR certificates for higher FAR and to build more dwelling units. We expect the farmers or any other land owner will get at least Rs 4 crore per acre, which is much higher than what he would have got by selling the land or under the acquisition policy for laying infrastructure," Rao said.

Source - TOI

Government plans to shrink Lutyens' Bungalow Zone

Delhi/NCR - The urban development ministry has proposed to reduce the Lutyens' Bungalow Zone in the heart of New Delhi by 5.13 sq km to 23.6 sq km, which if implemented could free up land in one of the most coveted and expensive residential areas in the country. The ministry has proposed to exclude areas like Babar Road, Bengali Market, Sundar Nagar, Jor Bagh, Panchsheel Marg and parts of diplomatic area in Chanakyapuri that were added to LBZ in 2003. When it was first demarcated in 1988, LBZ spanned 25.88 sq km. With the additions in 2003, it grew to 28.73 sq km.

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"Properties will become more affordable in this area going forward as builders will be able to reduce apartment sizes, even as the per sq ft remains the same or increases, bringing the overall ticket size down," said Ashwinder Raj Singh, chief executive officer-residential services at real estate services firm JLL India.

The Delhi Urban Arts Commission has proposed to restrict LBZ close to the original boundary envisaged by the British architect Sir Edwin Lutyens in 1912 while removing the transformed, commercialised areas and modern colonies which do not bear any semblance to the original character of the area while retaining the green areas which were included in the zone in 1988.

The commission on August 12 submitted a report to the urban development ministry that included a proposal to bring back the premises of the Supreme Court of India which was excluded from LBZ in 2003. The ministry has proposed floor area ratio (FAR), or the gross floor area permitted on a site, of 20 with 12.50% ground coverage, while in the present guidelines FAR is not specified. It has proposed that basement be allowed within the building line, only for household storage and parking. The building is to be restricted to a height of 12 metres and the number of dwelling units will range from one to four, depending on the size of the plot. 

Source - Economic Times, Delhi/NCR

Property demand in Delhi-NCR slumped by 35%: Assocham

NEW DELHI: Demand for property in Delhi-NCR region has slumped by 30-35 per cent in the last one year, a survey on Thursday said. 

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According to the survey by industry body Assocham, the unsold inventory pressure in the region is the highest among all other cities, even as prices have declined in the last one year. 

"The National Capital Region (NCR) residential market is stuck with an estimated inventory of 1,70,000 units while another 90,000 dwelling units under-construction are likely to be delayed for hand-over," the survey said. It added, "Prices of 3-bedroom, 2 BHK and single room flats have seen correction by 30 per cent in Noida, 25 per cent in Gurgaon and 15 per cent in some key areas of Delhi but still, the demand stays subdued." 

The survey was conducted by Assocham among 120 real estate developers in Delhi-NCR. 

"A large inventory is piling up despite prices correcting by over 20 per cent in the last one year, while there is a huge fall in the new projects being launched by developers who are hard-pressed for cash," the paper noted with concern. 

The increase in inventory level is because of the falling demand from actual users as well as investors. Even the ready-to-move flats are finding few buyers, majority of respondents who took part in the survey said. g "The sentiment in the housing market is really at a low key. Even though there are signs of macroeconomic improvement, it would be a quite a lag before it gets reflected on the real estate markets," Assocham secretary General DS Rawat said. 

The survey further said, one of the issues afflicting the sentiment is the high level of debt with the real estate developers and their poor valuations in the stock markets, limiting their avenues for repair of the balance sheets. 

Majority of real estate developers said about 60 per cent of the unsold real estate in the NCRregion is in areas that are currently uninhabitable. The problem has been confounded by delays in regulatory clearances and litigations. 

As per the survey, there are nearly 8.5 million workers engaged in building and other construction activities in India.

Source - TOI