Residential projects have attracted huge investments across the country in recent years, but many commercial plots in major cities are lying vacant due to a dearth of buyer interest, according to construction industry body CREDAI.
"While 12 million square feet is lying idle in Chennai, it will be more across the country. Many areas in Hyderabad, Bangalore and Gurgaon are lying vacant in commercial spaces," Construction Real Estate Developers of India (CREDAI) National Vice-President Prakash Challa told PTI.
Noting that the real estate industry saw a slowdown after the sub-prime crisis in the US, he charged the Centre with not taking any steps to revive the industry.
"If they had taken steps immediately after the crash of the US market, the sector would not have faced this much of a problem... All developers and agencies would have been cautious," he said.
Asked whether there was any positive impact from the government's intervention after the global economic crisis erupted in 2008, he said, "There are no good developments still in the commercial space front. Only limited investments are coming up."
"If the government extends the stimulus package, it will generate employment. But if they withdraw it, then there will be a serious problem. Today, many buildings are sitting idle and every builder has become cautious... They don't want to commit themselves (by investments in commercial spaces)," he said.
He said the situation is expected to improve over the next one or two years.
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Challa said Tier-II and III cities were the worst-hit, with no major developments in the commercial spaces sector. Nevertheless, real estate developers are investing heavily on huge residential projects, Challa said.
"Particularly in the Oragadam-belt (near Chennai), many builders are doing good business. It has become the favourite area for many developers as it has many commercial establishments nearby," he said.
He said low income housing projects have been a "grand success".
"I was told some builders have sold about 500-600 housing units in the low income category," he said.
The success was not only due to the presence of logistics parks, but the fact that people have also started looking at buying properties in newer areas, he said.
The Oragadam and Sriperumbudur belt currently has various companies -- including auto majors like Nissan Renault, Daimler India, Hyundai Motor India and consumer durable giant Samsung -- that have set up shop.
"Basically this area is only for budget homes... Not for the high-end," he said.
On the lack of proper connectivity to Chennai and other destinations from these localities, he said infrastructure would gradually be put in place as people begin to move in.
Infrastructure development would take time, as many people working in far off areas commute today from the city, he said.
Currently, real estate developers like Arun Excello, TVH, Tata Infrastructure and MARG Properties have real estate projects coming up in these areas.