Robust growth of IT/ITeS sector, affordable rentals & start-up boom have worked in favour of Southern office markets
Of 21.32 mn sq. ft. net absorption in FY21 across the top 7 cities, Bengaluru, Chennai & Hyderabad accounted for a 66% share, followed by West (MMR & Pune) with 21% & North (NCR) with 11%
Back in FY18, South cities comprised a 47% share, West – 33%, North – 17%
Office supply – of 40.25 mn sq. ft. of new office space completion in FY21, South cities dominated with a 63% share; West – 19%, North – 18%
Southern office rentals saw double-digit growth (11-15%) in this period; other regions lagged behind
Mumbai, 13 September 2021: The main South India office markets have overtaken other regions in terms of new supply, net absorption, and even rental growth. Among the top 7 cities, Bengaluru, Hyderabad, and Chennai saw their share of total office leasing increase to 66% in FY21 (against 47% in FY18).
The net office absorption in FY21 in the top cities was 21.32 mn sq.
The housing market in the top 7 cities is likely to attain a new peak by 2023, when housing sales are estimated to cross 3.17 lakh units and new launches by 2.62 lakh units during the year. City-wise, MMR and Bengaluru are all set to lead from the front
Of 36,260 units launched in Q2 2021 in the top 7 cities, the premium segment (priced b/w INR 80 lakh to INR 1.5 Cr) had the highest share (approx. 13,130 units); mid-segment (INR 40-80 lakh) had a 32% share (nearly 11,760 units)
Hyderabad, Bengaluru & Chennai together comprised a 72% share of total new premium supply in the second quarter
Covid-19 dents affordable housing supply share – reduced to 20% (approx. 7,230 units) as of Q2 2021
In the pre-COVID-19 period, affordable housing supply share dominated; post-pandemic, share drops dramatically from 40% in 2019 to 30% in 2020 – at 20% in Q2 2021
Developers strategically following trends – buyers of affordable homes most affected economically by COVID-19; high unsold affordable housing stock another concern at 33% of total 6.54 lakh unsold units in top 7 cities by Q2 2021-end
The pandemic has significantly altered previously dominant trends in the Indian residential market. Notably, it has dented the overall new affordable housing supply share across the top 7 cities. Latest ANAROCK research indicates that out of the total new launches of approx.
As per latest ANAROCK data, of the total sales made in the first nine months of FY2021 (approx. 93,140 units) across the top 7 cities, the top 8 listed players’ share stood at 22% while non-listed leading players’ share was 18%. Non-branded developers accounted for a 60% share
Latest ANAROCK data reveals that over 4.22 lakh units are scheduled to be completed by 2021-end across the top 7 cities. Of this, NCR would see the maximum completions with a nearly 28% share, followed by MMR with 26% and Pune with approx. 18%.
The total number of leases coming up for renewal in 2021 account for 90 Mn sq. ft. area. Interestingly, in terms of area, Bengaluru has the largest share at about 37%, with Mumbai coming in a distant second with a share of about 19%.
The stamp duty cut significantly stimulated housing demand in the city. The government would do well to seriously consider extending it to keep the property sales momentum - and registrations revenue - going.
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