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Indian Real Estate News : Kolkata
Kolkata Sees Rise in Commercial Real Estate Segment
Source: Indian Realty News Jan 20, 2010
After a lull last year, demand for commercial property is steadily rising. Realtors and developers feel market conditions should return to normal, although no one knows how long it will take. "It is definitely en route to revival. There may not be many transactions, but enquiry levels have increased around 30 per cent compared with January. It is a good sign. There is more demand for commercial spaces in the non-IT sphere," said Abhijit Das, joint managing director of Lemongrass Advisors.

Jitendra Khaitan, CEO, Pioneer Property Management, said, "Demand for commercial property is rising. There are large transactions. Prices for commercial property in central Kolkata have already appreciated," he said, adding that there used to be 10-20 transactions per month six months ago. However, there are about 100 transactions a month now. Most of the prominent real estate developers said demand for commercial property was rising and the future looked better than what it was six months ago. Santosh Rungta, president, Confederation of Real Estate Developers' Associations of India (CREDAI), said, "We expect the commercial real estate sector to revive in six to eight months. IT companies are reviving and demand for office spaces will gradually pick up. The overall industry has started recovering from the economic slowdown and is preparing to resume operations on a larger scale. Therefore, it seems likely that demand for office spaces will rise according to requirements."

With the revival of industries and the telecom sector witnessing rapid growth, hopes on commercial real estate have been resuscitated. Sushil Mohta, MD, Merlin Group, said, "While the residential real estate sector has picked up, we expect demand for commercial real estate to grow shortly. With the revival of industries and the telecom sector witnessing rapid growth, our hopes on commercial real estate have been resuscitated." According to Mohta, even retail and hospitality sectors were recuperating fast.

Harshvardhan Neotia, MD, Ambuja Realty, who recently inaugurated Ecospace, a 10-acre business park in Rajarhat, said, "There are signs of revival and enquiries have started coming in. Manufacturing industry, the IT sector and even individuals are enquiring. However, it is not at its peak." BD Mundhra, CMD, Simplex Infrastructures, said there had been a 15 per cent rise in demand. "Projects that have been completed are on their way to consumption. Projects that were on hold have started progressing. Demand in the past six months must have increased 15 per cent," he said.

Government cooperation, according to Pradeep Sureka, director, South City Projects, is inevitable to accelerate growth in the commercial sector. "The past few months have witnessed positive momentum in the demand of commercial real estate in Kolkata, especially Salt Lake, Sector V. Government support is required for speedy approvals and clearances from concerned departments to boost demand for commercial real estate," he said. However, a few in the industry have a contradictory view. Rajesh Somani, MD, Somani Realtors, said, "The supply of commercial property against demand is still very high. Now there are a host of options for commercial spaces - on EM Bypass, Sector V and Ruby Connector. New companies are not floating projects at the moment. However, if demand rises, there will be a complete revival in two years."

According to Rahul Saraf, MD, Forum Projects, the demand for commercial spaces was never significantly affected. "Commercial property had been doing well last year, especially after issuing of new telecom licences. New companies needed space since they outsourced, it generated demand for new call centres," he said. Rahul Todi, MD, Bengal Shrachi, and Kumar Shankar Bagchi, MD, Bengal Peerless, however, were skeptical about the revival of the sector. However, they agreed that there had been an improvement. "Definitely there have been more enquiries than there were in January to June. However, not significantly more. Rentals have fallen by almost 15 per cent against last year. The only positive side is that there is some demand," said Todi.

According to Bagchi, there were some prerequisites to the rise in demand for commercial property. "I do not think that commercial or even real estate properties are on their way to revival. One should appreciate that unless there is industrial growth and growth of agriculture and other sectors in Bengal, the demand for commercial space cannot look healthy. It will take at least another six months to improve," he said.

Tag: Real Estate India, Kolkata Properties, Commercial Properties
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