The Indian real estate sector doesn’t seem to have been bothering much about the recent downgrade of US credit rating. The lowering of the US rating from AAA to AA+, the analysts consider that only the sentiment would be affected by such lowering in short term. However in long run, the commercial property might have to face the challenges brought about by this lowering. According to Mr. Anshuman Magazine, managing director (South Asia), CB Richard Ellis, which is a leading real estate consultant company, there is no reason to worry because of such lowering as unlike mature economies, the Indian economy doesn’t rely much on foreign investment. Mr. Manoj Goyal, vice-president, Raheja Developers Ltd. is of the view that as external commercial borrowing (ECB) is not allowed in this sector, so consequently there won’t be much impact of this lowering in the real estate market.
But as Mr. Anshuman pointed that there can be a decline in the commercial real estate sector, the IT/ITes companies’ makes around 60% of the office off-take in the country presently and it is expected that over the time the demand for such space can fall. It is much obvious that IT firms will suffer due to the US crisis so it is expected that their demand for buying or renting new space will decrease.
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