Real estate scenario in 2009 and focus for 2010

By Mr Samson Arthur, General Manager (India), Quinn group

A slow but steady recovery of the economy seems to be underway with signs that the real estate gloom finally seems to be moderating. It also ascertains that prices bottomed-out during this period and signs of stable pricing, though not upward moving, seem to offer much needed relief. Property developers are therefore positive of a space uptake in 2010. However, while there was some consolidation in the later part of 2009 due to an easing in property prices, it became clear that only serious players with a strong focus on quality, reliability and customer satisfaction will sustain and continue to outperform in the long term.

This is because there are still worries facing the industry. A case in point looming large amongst developers are the huge debts raised to develop office towers, hotel complexes and retail projects during the good times when the economy was booming and credit was easy to come by. Other problems for the industry include a surge in bankruptcy and employee layoffs, along with near record levels of vacant office and retail spaces.

On the flip side, the ready availability of rental properties and downturn in prices has opened up an opportunity for players with intelligent, market-based business plans and superior customer care to win over consumers who have become increasingly value-for-money conscious.

For those that succeed in winning customer’s hearts during this period, 2010 could reap handsome rewards. Despite, the troubles facing the industry, the healthy growth rate of the wider Indian economy is expected to help the property market recover faster than those in the US and UK. It is estimated that IT, ITES and organised retail players will require more than 300 million sq. ft of office and commercial space in 2010. This demand will be further boosted by the opening-up of new land for construction projects.

With the industry’s new emphasis on offering customised solutions, flexibility of terms and enhanced customer care it is expected to lead to more construction of affordable housing and value-for-money commercial estates, 2010 certainly looks like a better year for developers and consumers alike.