Bengaluru Real Estate Doing Well In a Weak Market: JLL India

The Bengaluru property market is doing well, in an otherwise weak real estate market across the country which is seeing prolonged slowdown, JLL India told NDTV. "In terms of residential markets there is hardly any improvement. For a prolonged period we have seen slow sales and things are not improving soon because of monsoon quarter which is typically a weaker quarter," Ashutosh Limaye, head of research and real estate service, JLL India said. So what makes Bengaluru different from the rest of the residential property markets? JLL says it is because the Bengaluru real estate market is a more end-user focused one. "Amongst cities, Bangalore is doing fairly good, the city which is more mature, more dependent on end-users rather than investors or speculators," Mr Limaye said. (Watch) According to JLL India, during the first quarter of 2015 (calendar year), two significant market movements have been observed in Bengaluru's real estate market - an increase in new launches as well as a rise in the net absorption of units. While 13,400 units were newly launched in the first quarter of 2015, the corresponding figure stood at 11,170 units in 2014. Bengaluru also saw a net absorption rate of 8,310 units in the first quarter of 2015 compared to 7,210 units observed in the corresponding quarter of 2014, which is an increase of 15 per cent in total sales year-on-year. In fact, JLL says markets similar to Bengaluru are also faring better compared to cities likes Mumbai and Delhi. "Chennai, Pune, Bangalore which service more to end-users than investors are doing lot better than cities like Mumbai, Delhi which have a very significant investor population." Investors are not taking fresh calls in cities like Mumbai and Delhi because either they are locked in properties that they have invested in which have not yielded good appreciation or returns or they have no fresh capital to put in real estate because the situation is not conducive, JLL said. Inventory Levels Commenting on the overall state of the real estate market, Mr Limaye said inventory levels of property developers continue to be more or less static. Developers have lowered the number of new launches and are concentrating on completing the existing work to reduce the inventory level, it said. Buyers prefer to put their money in projects which are close to completion, Mr Limaye said. Commercial Real Estate The commercial real estate market is doing very well and leasing volumes have improved, JLL said. JLL India's forecast is that more than 30 million square feet will be leased in this calendar year itself. "And all cities are doing well Bangalore, Mumbai, Delhi, all of them have seen improved transaction volumes and rents are also picking up once again," Mr Limaye said. The behaviour of commercial and the residential property markets are inter-linked, the company said. "Usually we see a 9-12 months of timeframe lag so when we see more office space leasing that tells us that businesses are growing, more hiring will take place and for effect to get stabilised and get converted into purchases we usually see a 9-12 month window." JLL India expects the residential segment to see an uptick early next year with "much bigger activity" compared to now.

Bengaluru Real Estate Doing Well In a Weak Market: JLL India

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