will government's massive surge in investment ... - Myiris.com

Apr-Jun 2013 Earnings Preview
Commercial
The Indian Commercial market continues to reel under pressure, given the subdued
overall take up at 4.8msq.ft for Q1FY13, a sharp drop of 29% QoQ. The subdued take
up reported in Q1 is an indication of the slow Indian economy, coupled with a
lacklustre global economy.
Mumbai’s take-up has remained flattish at 1.25m sq.ft in Q1FY13, an increase of 3%
QoQ. Lease rentals have corrected sharply in the city leading to developers
converting commercial properties to residential. Although lease registration
numbers have been very strong, with April 2013 displaying the highest number that
we have witnessed (north of 12k), we would attribute this more towards potential
home buyers opting for the option on account of the financial viability. (Lease
registration numbers include both commercial and residential leases).
Bengaluru market’s take up of office space dipped by 2.4% QoQ. The upcoming
quarters are expected to witness moderate take up, given the subdued transaction
activity & high availability at 13.4%.
The delivery timelines of new projects continue to be revised as a result of the
economic slowdown & increase in construction cost. Cautious business sentiments
have affected demand across the country. Corporate leasing is expected to remain
muted.
Mumbai Rental Demand (msf) and Availability (%)
Take up (msf)
Availability (%) (RHS)
25
24
23
22
21
20
19
18
21
22 22
20
22
23 24 24
23 22.9 22.7
23
21.9
2.1 1.9 1.9 2.1 1.3 2.1 1.0 1.2 1.1 0.4 0.9 1.2 1.3
Q1
2010
Q2
2010
Q3
2010
Q4
2010
Q1
2011
Q2
2011
Q3
2011
Q4
2011
Q1
2012
Q2
2012
Q3
2012
Q4
2012
Q1
2013
2.5
2.0
1.5
1.0
0.5
-
Source: DTZ, PL Research
July 8, 2013 166