'Residential segment picking up pace'

Jones Lang LaSalle in its latest report ‘Pulse' for the month of June observes that the demand for office space remained stable with good leasing and preleasing activity, writes T. Lalith Singh

The real estate in the city for the last few months has been in a state of flux. A series of situations and developments right from political developments, dilemmas over certain government orders on land development and scarcity of construction material such as sand has the scenario getting more and more complicated.

However, the study by Jones Lang LaSalle for the city describes the office and retail space situation as being stable with the residential segment picking up pace in some select projects.

Its latest report ‘Pulse' for the month of June observed that the demand for office space remained stable with good leasing and preleasing activity. In absence of new office space supply in the city, the vacancy rate decreased marginally and few key transactions that took place during May included Callidus leasing SEZ space in Mindspace, AT&T leasing space at The V and JDA leasing space in Meenakshi Tech Park. These are located in the sub-market of Hitec City.

Sub-markets

It also notes that ‘after a steep rise (over last two quarters) due to depletion of quality leasable space, rents and capital values remained stable across all sub-markets over the month'.

Retail

According to the Jones Lang LaSalle report, given the limited mall space available for lease, the retail demand has remained stable in both prime as well as sub-urban high streets. Some of the upcoming mall projects such as Prestige's Forum Crystal, Manjeera Trinity and Manjeera Majestic continue to witness stable pre-leasing activity and Zamini pre-committed space in Manjeera Trinity Mall.

In the existing malls, the vacancy rates remained stable and overall mall rents too did not change across all sub-markets. “However, a few select good quality properties along prime high streets such as Banjara Hills and Jubilee Hills continued to quote rents higher than the market average,” it says.

Market sentiment

As per Jones Lang LaSalle, the residential sales picked up pace in select projects though the market sentiment continue to remain reserved. The major launches during May included Vasavi Bhuvana at Srinagar Colony and West Metro at Chandanagar. It also added that the capital values of selected projects in prime locations increased due to good sales volume, but overall capital values remained stable due to moderate sales.