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Waiting for the demand to go up
Posted by Srini Uppala | December 28, 2007 | 398 views
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Loading ...It is estimated that a whopping 88 million square feet of new residential space will come up by 2012
Finding a NOOK: The demand for residential space is set to pick up.
The real-estate sector in Hyderabad might have become sluggish as compared to the situation in last two years, but the outlook for the next five years is quite rosy.
It is estimated that a whopping 88 million square feet of new residential space will come up by 2012. “There may be lull. But the demand for residential space will soon pick. If investments start to trickle in to the approved 39 SEZs and other m ajor projects in and around the State Capital, it will prove to be a big demand trigger for residential space,” says V. Naga Marutish, Director of VR Net Consulting Private Limited.
The consulting company has come out with ‘Reality Insight’, a real-estate report on Hyderabad last week for TeluguProperties.com, an arm of the Navayuga Infotech.
Report prediction
Perhaps the first report generated locally on the real-estate scenario in Hyderabad, it predicts that there will be sale of about 12,000 units a year in the Grade-A property (deluxe apartments of 2 and three bedrooms, villas and row houses) and Grade-B property.
“Only real buyers are in the scene now. Speculators, short-term players and other buyers keen to acquire a house or a flat as a lucrative option are not in the fray,” he says.
The lull or sluggishness has been attributed, among other reasons, to cashing out of speculators who gained over 60 per cent on their sales.
But, according to him, it is not going to remain the same. “If IT exports and employment from Hyderabad raises a CAGR (compounded annual growth rate) of 20 per cent), a minimum of 22 million sq. f of new commercial space is expected to be added by various players, including the SEZ majors, by 2012,” the report says.
If the CAGR is at 30 per cent, the additional commercial space could be even 40 million sq. ft.
“Despite spiraling prices, the demand for high-end luxury apartments will continue in a few residential areas, which are near to the primary economic activity,” the report forecasts.
Mr. Marutish points out that large players, both Indian and multinational, continue to come out with large township projects.
The local players, the report feels, need to reorient their strategies in order to move up the value chain. “They should move away from the mass, undifferentiated products to offer customised products for different market segments,” the report observes.
SOURCES:
The Hindu
Topics: Real Estate |
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