High rent, market slump leave top floors vacant in Visakhapatnam

VISAKHAPATNAM: A slowdown in the economy and political uncertainty coupled with high rentals in the city have led to an increasing number of commercial spaces on the upper floors of swanky buildings in prominent locations lying vacant in the city.
Realtors pointed out that while commercial spaces located on the ground floor of buildings in prominent locations such as Sampath Vinayaka Temple Road, Asilmetta Junction, Rama Talkies-Maddilapalem Road, Dwarakanagar, Dabagardens and Siripuram are much sought after, the demand for upper floors is seeing a downward trend.The branch manager of a leading realty firm said, “Investments in the city have not really grown according to the expectations during the last two to three years.
Economic slowdown is one reason nobody wants to invest here. Added to this is the political uncertainty. With the division of the state being one of the burning issues and no proper package being announced for this region, investors are obviously reluctant to come forward.”
The realty firm official pointed out, “There is a demand for commercial properties on the ground floor. However, if you show an upper floor to clients, they are not willing to rake out the huge sums being quoted by the owners. There is a need for market correction in terms of commercial property pricing.”Another realtor based in Dwarakanagar said, “Some of the owners expect around Rs 40 per sq ft for the upper floors in some areas, though only Rs 20 to 25 can be expected realistically. Unless some positive development takes place in the region, it will take some more time for the upper floors to become sought after.”Govinda Raju M of Hanu Reddy Realty said, “Siripuram is one area where there is a lot of demand. However, there are few properties there.
Commercial space in Sampath Vinayaka Temple Road, Dwarakanagar, Asilmetta Junction and Rama Talkies-Maddilapalem Road are also sought after. The commercial property rentals in these areas range from Rs 80 to 110 per sq ft.” Of late, demand on VIP Road is also gaining traction because of three new commercial buildings that are expected to be completed this year, he said.Many companies such as telecom firms that used to operate on 5,000 to 6,000 sq ft are now reducing their requirement to around 1,000 sq ft, he said.
However, property owners are not willing to reduce their prices because they have experienced higher prices and expect that to continue.“The rentals definitely need market correction. The hotel industry suffered a lot last year because of the Samaikyandhra agitations and business has not been great overall. On top of this, the rentals are just cutting into the gains making it really difficult for businesses to thrive. Unless this changes soon, you can expect more vacant commercial properties,” said another hotelier with operations near Siripuram.