With the overall economic scenario beginning to look up, the commercial property market is

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also moving closer to stabilisation. This can to a great extent be attributed to higher rental activities. The future of the commercial space looks bright. At least that’s what the latest RICS Indian commercial property survey suggests.

“The results of this quarter indicate that with improving economic conditions in India, the commercial property market is also getting fortified and moving closer to stabilisation. Tenant demand has been improving gradually over past two quarters and confidence towards future rental activity is also quite positive. Fall in rental has more or less stagnated, but the amount of space available and in pipeline will keep rental increase in check, barring industrial space where there is a comparatively lesser available space. Modest rise in capital values across sectors is also encouraging,” Sachin Sandhir, managing director and country head, RICS India, told FC Estate.

The RICS survey said, “Rental activity in India picked up at a notably faster pace in the fourth quarter of the last calendar, which lifted optimism among property professionals. Significantly, the strengthening in tenant demand has occurred across the three major sectors (office, industrial and retail) although rising available space continues to keep rental expectations in check.”

The survey also made an attempt to find India’s standing vis-à-vis other emerging economies of Asia, when it comes to commercial property market. India, in fact, displayed the highest growth in tenant demand compared to the previous quarter. This despite the fact that India is still lagging far behind the Chinese economy on most other indicators like investment bidders per property and rental expectations. Although with rentals now stabilising, further decline in yields seems inevitable during the first quarter of the financial year 2010-11, it felt.

The RICS Indian commercial property survey was released simultaneously with the RICS global commercial property survey Q4 2009. Thus, one can keep the two reports side by side and see for oneself as to where India stands vis-à-vis the rest of the world. Investor activity rose across 70 per cent of the globe as commercial property recovered as an asset class, says RICS global property survey.

Commercial property transactions rose across most parts of the world, with Brazil and China leading the way. With generally low interest rates and relatively high yields, investors have returned to commercial property. The net balance of surveyors reporting a rise in transactions in Brazil rose from 29 per cent to 61 per cent in the fourth quarter, while the net balance in China edged up to 58 per cent from 47 per cent.

However, the survey reported a drop in activity in the US. Occupier demand has also been most visible across the emerging economies with lettings activity picking up most in Latin America, emerging Europe and most of Asia, the RICS survey said.

Talking about the UK, it said that the UK property recovery had been led by the London office market, with the amount of available space declining for the first time in two years. However, elsewhere in the UK and across 90 per cent of the globe, the amount of available space had continued to rise. There were some notable exceptions. Brazil, Peru, Venezuela, Austria, Hong Kong and Ghana are all witnessing mild declines.