The market conditions, business sentiments and overall outlook in India have improved since the new Indian Government that assumed power in May this year. The Government have taken positive steps and also generated hopes and optimism around big-ticket reforms in near future. This has brought cheer to the stock markets in India hoping that the reforms would translate into business opportunities and economic revival. In September 2014, Standard and Poor’s raised the outlook for India’s “BBB-minus” rating to “stable (Investment Grade)” from “negative,” saying the country’s government mandate and improved political setting offered a conducive environment for reforms.
The steps being taken for Real Estate are encouraging and as we move closer to another new year, many of the steps (like launch of REIT’s, relaxation of FDI etc) and anticipated measures ( modifications in new land acquisition law, real estate regulatory bill etc) will push India’s real estate industry to flourish.
We feel that the calendar year 2014 is expected to have incremental demand of 15% over 2013 and we expect the demand to be around 30 Mn sq ft in 2014 (compared to 26 Mn sq ft demand in year 2013). The PAN INDIA take of 8.1 Mn sq ft recorded in Q3 2014 was the highest in the last five quarters. Demand though, currently been stagnant in Delhi NCR but early concrete signs of growth numbers in real estate seems to be coming strongly from the Bengaluru Region due to increased activity around IT and ITES services. Bengaluru region continued to be highest contributor of take-up in Q3 2014, contributing close to 30% demand of space across 7 cities in India.
We also feel that the recent indications by the Central and States Governments in India regarding Green Building Incentives – – like increased FAR for Green Building, property tax rebates etc are also encouraging signs for the sector. Cherry hill has been consistently advocating this line for many years and are happy to see such positive indications.
Quote from Mr Rajiv Mohan, MD, Cherry Hill Interiors Limited, India’s leading corporate interiors firm specializing in LEED certified projects.