Boston, MA -- (ReleaseWire) -- 04/29/2014 -- GDP growth in India drop to the lowest level in over a decade in 2013, while persistent structural issues ranging from the financial system to national infrastructure saw widespread capital flight in addition to record setting lows for the Indian Rupee against the dollar. All these factors represent a challenging environment for the commercial real estate sector.
Despite these challenges, the commercial real estate market has thus far managed to avoid significant downturns, although demand, vacancy rates and rental stability in the short term remain a cause for concern. Nevertheless, BMI shares the consensus opinion that both economic performance and aggregate demand will improve post 2014, as investors begin to return to an Indian market which continues to display solid growth potential. Despite this we have downgraded our real growth projections for private domestic demand leading us to downgrade our headline real GDP growth forecast to 5.0% for 2013/14 from 5.5% previously.
View Full Report Details and Table of Contents
The present Indian government has attempted to induce economic reforms in addition to a national infrastructure redevelopment in the months leading to the 2014 parliamentary election. Reductions on levels of foreign project financing, in addition to more restrictive controls on international investment by domestic firms, has helped foster the emergence of new capital in addition to relieving the pressure on a government already heavily reliant on borrowing. The lack of large-scale development in 2013, especially in the office sector, had a neutralising effect on rents, which have marginally declined or seen no significant changes.
Despite recent economic slowdown the long term potential of the retail sector remains bright, with a growing middle class with an increased disposable income. Recent developments in the retail sector include: The UK's Tesco has received the go-ahead to invest US$110mn in a joint supermarket venture with the Tata Group conglomerate. The newly elected Delhi government led by the Aam Aadmi Party has been widely criticised for its withdrawal of approval for foreign direct investment in multi-brand retail in Delhi. TUI Travel India has opened its sixth retail store in India, and its first in Mumbai. Though somewhat stagnant through 2013 due to lowered construction levels, scarce investment and consistent vacancy, India's retail sector shows enormous potential for growth in the medium-term, and could likely reach double-digit growth into 2014.
- In the first nine months of FY14, Sobha launched six new projects: 3.38mn square feet of developable area and 2.01mn square feet of saleable area.
- Parsvnath 27 in New Delhi - a centrally air-conditioned commercial complex with 100% power back up and more than 200 fully automated mechanised car parks. The property has a total saleable area of 12,000m2 and currently approvals are in place.
About Fast Market Research
Fast Market Research is a leading distributor of market research and business information. Representing the world's top research publishers and analysts, we provide quick and easy access to the best competitive intelligence available. Our unbiased, expert staff is always available to help you find the right research to fit your requirements and your budget. For more information about these or related research reports, please visit our website at http://www.fastmr.com or call us at 1.800.844.8156.
Browse all Business research reports at Fast Market Research
You may also be interested in these related reports:
- Russia Real Estate Report Q2 2014
- Croatia Real Estate Report Q2 2014
- Germany Real Estate Report Q2 2014
- Pakistan Real Estate Report Q2 2014
- South Korea Real Estate Report Q2 2014
- Japan Real Estate Report Q2 2014
- Australia Real Estate Report Q2 2014
- United Arab Emirates Real Estate Report Q2 2014
- Slovakia Real Estate Report Q2 2014
- Czech Republic Real Estate Report Q2 2014