Housing sale rose by 9 percent annually while office demand increased 43 percent during January-March period across eight major Indian cities on better demand for luxury homes and premium workspace, according to property consultant Knight Frank India.
Releasing its ‘India Real Estate: Office and Residential Report (January-March 2024) through a webinar on Thursday, Knight Frank India said housing prices rose in the range of 12-13 percent annually during January-March across eight cities – Delhi-NCR, Mumbai, Chennai, Kolkata, Hyderabad, Bengaluru, Pune and Ahmedabad. Office rent grew by 1-9 percent.
As per the data, the housing sale increased to 86,345 units across eight cities in January-March compared with 79,126 units in the year ago-period. The gross leasing of office space went up 43 percent to 16.2 million square feet in January-March this year from 11.3 million square feet in the corresponding period of the previous year.
Commenting on the report, “Knight Frank India Chairman and Managing Director Shishir Baijal said, “The real estate market experienced another exceptional period characterized by robust performances in both the office and residential sectors.” The housing segment particularly witnessed a significant surge, propelled by continued growth in sales in the higher price category of Rs. 1 crore and above, he said.
“This only demonstrate a strong demand trajectory but also reflects buyers’ confidence in making long-term commitments,” Baijal said.
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Concurrently, he noted that the office sector maintained its upward trajectory, delivering one of the most impressive quarterly demand performance to date.
“The country’s economic stability has spurred businesses operating in India to expand their operations, consequently driving demand for office spaces.” Additionally, many companies are now reverting to conventional office setups, either reducing or discontinuing their work-from-home policies, further booting demand, CMD said.
Baijal expects these activities to continue at a robust pace in the foreseeable future backed by stable economic policies and favourable domestic conditions. According to the data, housing sales in Mumbai rose to 17 percent to 23,743 units during January-March this year from 20,300 units in the year ago period.
Office leasing in the city increased 29 percent to 2.8 million square feet from 2.2 million square feet.
Delhi-NCR saw 1 percent increase in housing sale to 15,527 units from 15,392 unit, while, office demand in the region rose 19 percent to 3.1 million square feet from 2.6 million square feet.
In Bengaluru, housing sales dipped 2 percent to 13,333 units from13,390 units while the office demand in the IT city remained flats at 3.5 million square feet.
Housing sale in Pune grew 14 percent to 11,382 units from 10,368 units, while office demand jumped more than two times to 1.9 million square feet from 0.8 million square feet.
In Ahmedabad, the sales of residential properties went up 11 percent to 4,673 units from 4,225 units. The office demand increased 18 percent to 0.5 million square feet from 0.4 million square feet.
Housing sales in Chennai grew 8 per cent to 3,950 units from 3650 units, while office leasing increased 45 per cent to 1.2 million square feet from 0.8 million square feet.
Kolkata saw a 12 per cent increase in housing sales to 3,937 units during January-March this year from 3,501 units in the same period last year. The office demand in Kolkata fell to 0.2 million square feet.
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Elaborating on the trend in office market, Knight Frank said that India facing business continued to anchor Indian office market and constituted 37 per cent of office demand with transactions of 5.9 million square feet.
Global Capability Centres (GCC) further consolidated their position making up 31 per cent of office demand with transaction volumes of 5 million square feet in January-March this year.
Flex space operators accounted for 23 per cent or 3.8 million square feet of the transactions in the first quarter of 2024 calendar year.
On the housing market, the consultant said that the share of sales in the Rs 1 crore and above ticket-size segment grew significantly to 40 per cent in January-March 2024 compared to 29 per cent a year ago.
“The need for larger living spaces and an upgraded lifestyle was sparked during the pandemic continues to fuel demand in this segment,” it added.
Knight Frank said the weighted average prices have appreciated for all the leading eight markets in tandem with demand growth.
“New home prices in Hyderabad saw the sharpest rise at 13 per cent year-on-year as focus increasingly shifted toward the development of premium properties,” the consultant said.
Mumbai continued to be the most expensive market at Rs 7,891 per square foot.
Courtesy: Press Trust of India
