MMR residential sales at its worst in the last seven years City sees a dip in office transactions too: Knight Frank India

Posted by: at 1/11/2017 01:56:00 am

Mumbai, January 11, 2017: Knight Frank India today launched the sixth edition of its flagship half yearly report - India Real Estate. It presents a comprehensive analysis of the residential and commercial market of Mumbai Metropolitan Region (MMR) for the period July - December 2016 (H2 2016).

Residential Takeaways: 

·         Big blow to the residential sector with both launches and sales plummeting by 53% and 26% respectively in H2 2016

·         Demonetisation disrupts market sentiment in Q4 2016; sales plunge by 50% to 8,617 units and launches by 77% to 2,617 units

·         New launches and sales in the premium segment decline by 69% and 16% respectively in H2 2016 compared to H2 2015

·         Premium markets of South Mumbai and Central Mumbai worst hit with sales lower by 54% and 41% respectively in H2 2016 compared to H2 2015; Thane and Peripheral Central Suburbs at 37% and 28% relatively better off

·         Unsold inventory level comes down steadily from a peak of 213,742 units in H1 2014 to 154,699 units in H2 2016


Mumbai Residential Market Trend:

MMR residential sales at its worst in the last seven years  City sees a dip in office transactions too: Knight Frank India

Source: Knight Frank Research

Impact of Demonetisation:

Impact of Demonetisation:

Source: Knight Frank Research

Office Takeaways:

·         Mumbai’s office market sees a decline in both new completion and transactions in H2 2016 compared to H2 2015. New completion at 1 mn sq ft was lower by 73%; transactions dipped by 34% to 3.3 mn sq ft

·         Occupiers grapple with the uncertainties posed by Demonetisation, Brexit, US Presidential election and Federal rate hike

·         BFSI and manufacturing sectors lead demand taking up large office spaces in PBD and SBD West

·         SBD West, PBD and SBD Central see the largest contribution to the office demand during H2 2016; Central Mumbai and BKC face dip in transaction share due to supply shortage

·         Shrinking new completions and lower vacancy level push up office rents; BKC and Central Mumbai rentals higher by 6% in H2 2016 over H2 2015 followed by SBD West at 5%


Mumbai Office Space:
MMR residential sales at its worst in the last seven years  City sees a dip in office transactions too: Knight Frank India

 Speaking about the findings, Dr. Samantak Das, Chief Economist & National Director - Research, Knight Frank India said, “H1 (January-June 2016) raised hopes for the MMR residential market and we predicted H2 2016 on a growth trajectory. But H2 2016 suffered a setback with launches and sales down by 53% and 26% YOY respectively. The major reason of this fall can attributed to the demonetisation move. In fact the last quarter (Q4 2016) witnessed a steep 39% decline in sales YOY resulting in the MMR residential sales in 2016 being at its worst in the last seven years. We believe that uncertainties will prevail till the next quarter.

The office market saw a marginal slide of 6% YOY in transaction in 2016 and this has brought a pause on the growth momentum of last three years. The major reason for this slowdown in transaction may be attributed to the limited supply in the region. Vacancy at the city level is on a decline and sought after business districts like BKC and Lower Parel experience a vacancy of sub 5%. Because of steady demand and limited supply, rentals have jumped by 16% YOY during H2 2016.”


About Knight Frank 


Knight Frank LLP is the leading independent global property consultancy. Headquartered in London, Knight Frank has more than 13,000 people operating from over 400 offices across 59 countries. These figures include Newmark Grubb Knight Frank in the Americas, and Douglas Elliman Fine Homes in the USA. The Group advises clients ranging from individual owners and buyers to major developers, investors and corporate tenants. For further information about the Company, please visit www.knightfrank.com.

In India, Knight Frank is headquartered in Mumbai and has more than 1,000 experts across Bangalore, Delhi, Pune, Hyderabad, Chennai, Kolkata and Ahmedabad. Backed by strong research and analytics, our experts offer a comprehensive range of real estate services across advisory, valuation and consulting, transactions (residential, commercial, retail, hospitality, land & capitals), facilities management and project management. For more information, visit http://www.knightfrank.co.in/


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