Commercial office space rentals in India are expected to yield positive growth in 2015, according to standards setting body Royal Institution of Chartered Surveyors (RICS).
According to RICS’ Global Commercial Property Monitor for Q2, the Occupier Sentiment Index edged up from 2 to 8 suggesting a slight improvement in sentiment compared to the previous quarter. “This was driven by a further modest rise in occupier demand over the quarter. At a sector level, the latest results show offices continue to demonstrate greatest resilience with the demand indicator running ahead of the leasable space measure for the sixth successive quarter. This is reflected in rent expectations which are more upbeat in offices than other sectors,” said the report.
The Investment Sentiment Index, however, did not see much change over the quarter. “Investment enquiries continue to increase and at a similar pace to the early part of the year. The supply of property for sale also rose at pretty much the same rate. Despite this, expectations for capital values remain firmly in positive territory both at the short and medium term time horizons,” RICS said.
Sachin Sandhir, global managing director, emerging business at RICS said growth in investment demand is being outpaced by that of supply across South Africa, China and India. “Notably amongst the emerging markets, India is the only country, which has recorded a marginal positive growth in both occupier and investment community,” he said.
The commercial real estate market in India seems to be showing signs of improvement, said Devina Ghildial, managing director, South Asia at RICS. “On account of positive capital value expectations, demand for quality office space seems to be holding ground and investors seem to be looking at adding stabilized assets to their portfolio. A careful watch on how much is being absorbed over the coming quarter will determine the fate for the rest of the year.”