US Sub-prime crisis to have short-term adverse impact on Indian realtyUS Sub-prime crisis to have short-term adverse impact on Indian realty
Apnaloan.com Research Bureau
17 May 2008
Much is known about the adverse impact of the US sub-prime crisis, but there is some good news.
According to a report titled 'Impact of the US Sub-prime crisis on the Indian Real Estate Market' by international realty consultants, Jones Lang LaSalle Meghraj, the Indian realty is expected to benefit from the sub-prime crisis in the medium to long term. The negative impact of the crisis is expected to be short term.
At present, US contributes about 40-45 per cent of the total IT/ITeS outsourcing and off-shoring business in India and it is the largest market for India's IT/ITeS business.
This demand has contributed to the growth of realty in India and the shift in its economy.
As a result of the US sub prime crisis, there has been a slowdown of its offshore operations in India, driven by the cost-cutting approach.
This is expected to result in a slowdown for demand of office-space and lead to excess supply of space which is available as a result of large volume of supply planned across major cities. This will mean that about 9-13 per cent of the office space will be vacant.
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