Govt measures to boost real estate market

A slew of measures taken by the UPA government in the recent few months will boost the subdued real estate markets, say experts.

The decision to open up the retail market to Foreign Direct Investment (FDI), Cabinet’s nod to the Land Acquisition Bill are some of the bold measures that will go a long way in providing a much-needed boost to the real estate market.  

The Government has also decided to extend the Delhi Metro service to Greater Noida and the proposed metro link in north-west Bangalore are likely to have a positive impact on the residential market of these cities.

The FDI in multi-brand retail will also boost the demand for commercial real estate.

Apart from the international retail giants such as Walmart, several domestic brands are also exploring opportunities to increase their foot prints across the country. This anticipated growth in demand is expected to bring some upward movement in retail rentals, particularly along established hubs.

According to a recent report by real estate consultant Jones Lang LaSalle (JLL), major cities like Mumbai, NCR-Delhi, Bangalore, Chennai, Pune, Hyderabad and Kolkata, will see the addition of close to 9.5 million sq ft of mall space in 2013.

The primary reason is that a sizable amount of supply that was expected to reach completion in 2012 has been being pushed to 2013.

While Mumbai, NCR-Delhi, Bangalore and Chennai will together contribute 70 per cent of the total retail space absorption, cities like Pune, Hyderabad and Kolkata will account for the remaining 30 per cent.

The ongoing policy reforms are expected to provide some cushion to corporates who are likely to execute their expansion plans in near future.