THE DARK NIGHT IS OVER

Normal 0 false false false EN-US X-NONE X-NONE MicrosoftInternetExplorer4 st1:*{behavior:url(#ieooui) } /* Style Definitions */ table.MsoNormalTable {mso-style-name:"Table Normal"; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-priority:99; mso-style-qformat:yes; mso-style-parent:""; mso-padding-alt:0in 5.4pt 0in 5.4pt; mso-para-margin:0in; mso-para-margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:11.0pt; font-family:"Calibri","sans-serif"; mso-ascii-font-family:Calibri; mso-ascii-theme-font:minor-latin; mso-fareast-font-family:"Times New Roman"; mso-fareast-theme-font:minor-fareast; mso-hansi-font-family:Calibri; mso-hansi-theme-font:minor-latin; mso-bidi-font-family:"Times New Roman"; mso-bidi-theme-font:minor-bidi;}   As the dark clouds of marketslowdown have lifted, commercial realty segment is finally looking up. Thesituation is only going to go better now, say experts. Read on to know more...   Even as residential market picks upand end users flock back to book their dream homes in various housing projects,action is slowly gathering pace in commercial realty market too - after a longtime, there is a positive movement here.    While it will take at least twoyears for DLF Corporate Green building in Sector 74 in Gurgaon, near Haldiram, to become fully operational,the construction is giving a huge boost to commercial realty scene. There is adefinite buzz in market for this latest offering from the stable of a marketleader. This is all the more surprising considering that rentals in goodbuildings have also seen big slump in Delhi ,as well as in NCR towns.    As if this were not enough, there isa glut in available space in most of the buildings in these areas. A lot ofoffice space is up for grabs as many big-ticket companies have shifted frombigger to small offices in the past few months after they were hit hard byeconomic slowdown. A large number of companies resorted to such measures inorder to reduce their overheads. The number of companies which were occupying10,000 sq feet or more space and then shifting to smaller spaces is not small.In the world of realty, any office that is spread in an area of 10,000 sq feetis considered big. Despite all this, DLF Corporate Green has, in a way, becamea test case to prove that commercial market is also getting back into its own,slowly.    Sanjay Rai, spokesman of DLF, sayswhile he cannot say with certainty that their new offering would reviveactivity in commercial property segment, there are three very important factorsin realty sector that play a key role in determining demand of any residential as well as commercial buildng :one, right pricing; two: right location, and three: track record of the realtyfirm in terms of completing their project. If any property has all these three,it is bound to attract the attention of customers, Rai feels.    "I couldn't agree more withthese three points," says Devender Gupta, CMD, realty advisory Century 21 India , adding,"I feel the pricing in the case of DLF Commercial Greens is verysignificant. They have fixed Rs 5,200/sq feet in their new building when thecurrent rates in commercial buildings in same area are hovering between Rs6,500/sq feet and Rs 7,500/sq feet. You would not get commercial space at Rs5,200/sq feet in any commercial buildings like Unitech Business Zone, Times Square , ABW Tower and other suchbuildings. These buildings are either on Iffco chowk or close to it."   Zafar Iqbal, formerly of IndianAdministrative Services and an expert on land related matters, says as economyis showing definite signs of improvement and the affects of economic slowdownare disappearing, the commercial side of realty is bound to see better days. Hesays that even though enough space is on offer in prestigious buildings, therewill still be enough demand for good buildings in nice locations elsewhere.But, there is another opinion that due to various counteracting factors, itwill not be easy for commercial projects to create buzz in market.   A spokesman of Integrated PanRealtySolutions Private Limited says while it is true commercial properties look tobe in for better times, the situation is nowhere close to developments inresidential projects. Explaining his stand, he says getting a loan for aresidential project is much easier compared to getting one for a commercial project , as investment ticketsize is bigger for commercial projects than in residential projects. In thisscenario, it will take some time for commercial properties to be sold like hotcakes.    Some also say lease rentals are lowdue to poor demand of leased spaces; this is thus making commercial real estatelesser attractive than residential real estate. Several vacant buildingsexemplify the challenge faced by investors in commercial properties. Themaintenance cost is as high as Rs 20 psf (per square feet), even if the buildingis vacant, and wastage in common areas is as high as 40%.    Sunil Jindal, CEO of SVP builders,also says unlike residential realty, commercial realty is only improving.Citing the example of his firm's project, Ghaziabad-basedOpulent Mall , he says more enquires are pouring in for space now. The goodthing is some of the queries are serious and a few even translated into deals."I expect that with an improvement in economy, Q2 results of most of thecompanies have surged, hence, from now onwards, companies of all sizes will buycommercial space." Rajeev Rai, vicepresident (corporate) of Assotech Ltd , feels thisis just the right time to buy commercial property.   Courtesy:- ET dt:- 20-11-2009    

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