Mumbai and NCR realty markets under pressure: Mayank Saksena

In a chat with media, Mayank Saksena, MD – Land Services, JLL India, says Bangalore and and Pune real estate to see appreciation over time. Edited excerpts

Are people making use of slums in realty market and are we seeing any land deals and if so in what sectors are they happening right now?
If you look at, the market is going through a very interesting curve right now. On one side, when we see at the retail asset class, we see a short supply and the demand has picked up really well. Not many new malls are being constructed and there is a robust demand which has come for the same with international retailers also queuing up to take up space.

When we look at the commercial space, the quality commercial space which is the A grade commercial space again sees a huge amount of takeoff and the supply is not there but probably the interesting part, the play comes in the residential side and that too specifically which is what is happening in the Delhi.

I think if you look at in Delhi, currently we have 55,000 residential units which have been under construction for more than six years and which have been unsold.

You have a huge inventory of unsold residential units and the sad part is that all these units are under construction for more than six years whereas typically we would take a three or three-and-a-half years time horizon for construction for projects. This is actually going to put this particular segment into more stress because you would not see the takeoff of happening of these units so quickly, number one; and number two, probably the quality of construction will keep on deteriorating for these supply also.

Which are the pockets in residential real estate where you expect an appreciation? When we heard this story about NCR, Mumbai is kind of under the weather right now; Bangalore is probably a bright spot. What is your view?
If you ask me frankly, Bangalore is always a green city because you are seeing the maximum amount of office space absorption happening in that city. As an investor, if you are going to invest into residential project in Bangalore, you would still see a healthy appreciation to your investment. The market which would remain to be under pressure would be Delhi so largely the NCR pocket be it Noida and be it Gurgaon, also, somewhat to a larger extent, Mumbai. Whereas Bangalore and Pune would be the two markets which would see a favourable price rise over a period of time.

Credits ET Realty

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