The rise in commercial projects in Chandigarh, which promises to provide a new facade to the city, has also fuelled speculation of about possible over-supply in the commercial sector in the city in the coming years.
The three projects coming up in the commercial sector (by L&T, Godrej Properties and Acropolis) are expected to be rolled out in the next one to two years. However, real estate experts express fears of oversupply in the coming years . The demand and supply situation is also likely to be skewed as well.
The conversion policy brought by the UT administration few years back, which allows conversion of industrial plots into commercial ones, has resulted in many industrial plots going in for the shift.
A property broker actively dealing in properties going in for conversion maintains that around 125 conversions have been facilitated under the policy.
Of these conversions, 35-40 players are likely to generate interest in the hospitality sector while four to five players are eyeing the retail space, the rest being interested in the commercial side.
Few days back the Chandigarh based Mirage Infra Limited, a subsidiary of Jagan Group, announced its foray into real estate by launching a commercial centre project, Acropolis.
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Similarly, L&T Realty, the realty arm of Larsen and Toubro, is coming up with projects in Chandigarh that would be a mix of retail, commercial and hospitality. The commercial space is expected to be ready by 2012. Similarly, Godrej Properties, the real estate arm of Godrej, is developing commercial space in Chandigarh with an investment of Rs 200 crore. The project is expected to be ready by next year.
The commercial players believe Chandigarh’s appetite for commercial space is still not satiated and this would lend impetus to the sales in commercial space.
The average prices hovering in industrial area for commercial spaces are averaged at Rs 9500 per sq yard which the players believe was an attractive price considering the prevailing price in city.
The sales partners, however, maintain chances of spurt in demand for commercial space in Chandigarh remained bleak and there would be limited demand for the spaces in next few years.
Also, fear of more developers trying to jump in the fray for commercial spaces would possibly lead to a bottleneck situation.