NCR sees a resurgence in residential launches with 90% YoY growth: Knight Frank India

~Supply outshines demand in office market~

Chandigarh, July 25, 2018: Knight Frank India today launched the ninth edition of its flagship half yearly report - India Real Estate. It presents a comprehensive analysis of the residential and office market performance of NCR for the period January – June (H1 2018).

Office Takeaways:

· The first half of 2018 fared well for the NCR office market with closing of some large deals. The region clocked 0.31 mn sq m (3.4 mn sq ft) in H1 2018 registering a single digit growth of 4% from the same period in 2017

· Supply outshone the transaction activity and approximately 0.33 mn sq m (3.6 mn sq ft) of new office supply entered the market in H1 2018 as opposed to 0.17 mn sq m (1.8 mn sq ft) in the same period in 2017

· Gurugram yet again outperforms other markets and takes up 66% share of the total transaction pie; YoY growth of 28%

· Overall rents remain stable; lack of quality supply puts pressure on rentals in select office areas in Gurugram

· Steady leasing brings down vacancy levels to16.5%

· ‘Other Services’ sector takes up 54% from the overall transaction pie. BFSI and IT/ITeS improve their performance in H1 2018

Speaking about the findings, Mudassir Zaidi, Executive Director – North said, “At a broad level, the first half of 2018 has started on a positive level for the NCR real estate market. The supply side is seen to be upbeat largely because of structural reforms like RERA and GST taking shape. This is evident from the fact that many notable developers have launched new projects in the first half of 2018 marking the resurgence of the mid segment ticket bracket. However, a lot of effort needs to be put to re-instill confidence in the buyers who are still wary of the market. Given the market dynamics, we see ready-to-move-in projects to garner interest from buyers, since it gives them the confidence for the delivery of the project. On the office front, we see that the steady demand has brought down the overall vacancy levels with an upward pressure on rentals. Going forward, we believe that the office market will continue to hold onto its current reins.”