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Business Associations Call for Rationalization of Overvalued Commercial Zones

Business associations are increasingly calling for the rationalization of overvalued commercial zones, citing the growing mismatch between official guidance values and actual market dynamics. In many cases, government-notified rates have been set too high without adequately considering real-time demand, market absorption rates, and business viability. This overvaluation has placed significant pressure on businesses, particularly small and medium enterprises, by inflating acquisition costs, leasing rates, and overall operational expenses. Associations argue that if guidance values continue to exceed realistic market levels, it could deter new investments, slow down business expansions, and reduce competitiveness in key commercial areas.

The call for rationalization is driven by the need to create a more balanced and sustainable commercial real estate environment. Business leaders emphasize that excessively high guidance values can lead to underutilization of prime spaces, longer vacancy periods, and overall stagnation in the real estate sector. They suggest that periodic, data-driven reviews of guidance values, with direct input from market participants, would help ensure that valuations reflect ground realities rather than speculative expectations. A more rational approach would not only encourage healthy business growth but also help governments maintain consistent revenue collections through more frequent and realistic transactions.

If governments respond to these concerns and adjust the valuation methodologies accordingly, it could lead to a revitalization of commercial hubs that are currently facing sluggish demand. Business associations believe that a transparent and rational valuation framework would reinvigorate leasing activity, stimulate property sales, and enhance the attractiveness of commercial zones for investors and occupiers alike. This, in turn, would contribute to the broader goal of fostering dynamic, resilient, and inclusive urban economic growth.

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