They saw collective office space absorption of nearly 21 million sq ft as against just 6 million sq ft in entire NCR
Even as the liquidity crunch and stalled/delayed projects continue to plague the real estate sector, the main southern cities of Bengaluru, Chennai and Hyderabad have seen faster growth momentum than their northern counterpart NCR, says new research.
Bengaluru, Hyderabad and Chennai saw 77 percent increase in new residential supply in 2018; NCR 16 percent, MMR and Pune 17 percent. Chennai led new launch supply with 98 percent increase, Bengaluru 91 percent, Hyderabad 43 percent. Bengaluru, Hyderabad and Chennai saw 20 percent increase in housing sales; 18 percent in North, 15 percent in West, as per data by property consultant ANAROCK .
The three main southern cities collectively saw an increase in new residential supply in 2018 over the previous year from approximately 38,330 units in 2017 to 67,850 units in 2018.
NCR, on the other hand, saw an increase of just 16 percent in new supply in 2018 against the preceding year. The main West Indian cities of MMR and Pune together saw a mere 17 percent jump in new residential supply numbers in the same period, it says.
Chennai led with a significant 98 percent increase in the new launch supply among the southern cities. Bengaluru followed with a 91 percent jump, while Hyderabad witnessed a rise of about 43 percent in new housing stock.
Even on the sales front, the main southern cities collectively overtook their northern and western counterparts. They saw a 20 percent increase in housing sales as against 18 percent rise in the North and 15 percent in the West.
The collective unsold stock in these southern cities is a mere 19 percent of the total 6.73 lakh unsold units across the top 7 cities. NCR alone has nearly 28 percent of the total unsold stock, the report said.
The housing markets in the southern cities are exceptionally resilient, and were quick to recover from the overall slowdown in the Indian real estate sector. The fact that these cities are driven by demand from the IT/ITeS sector definitely played a role. However, more pertinently, these are largely end-user driven markets, unlike cities in the north that were driven by speculators, it noted.
As for commercial real estate, it remained the most buoyant sector in 2018 across major cities. Demand for Grade A office space saw new highs and vacancy levels declined in prime locales. Here too, the southern cities surpassed their northern counterparts.
As per ANAROCK data, the main southern cities saw collective office space absorption of nearly 21 million sq ft as against just 6 million sq. ft. in entire NCR. In terms of new supply too, the southern cities raced ahead with nearly 14.7 million sq ft of Grade A office space getting deployed there in 2018.
Among the southern cities, Bengaluru retained its top position with more than 9 mn sq ft of new supply in 2018. Office absorption in Bangalore touched nearly 12 mn sq ft by the end of the fourth quarter of 2018, denoting a massive annual increase of 37 percent. The city’s large talent pool, its vibrant start-up culture, ample Grade A office stock, relatively affordable rents and steady demand from the IT/ITeS sectors, BFSI and co-working spaces prompted this growth, the report said.