WE MEAN BUSINESS

A strong macro-economic environment, stable yield, robust demand and India’s emergence as a hub for global in-house centres/captive centres, have led to 2018 being a significant year for the commercial real estate sector

The year 2018 has been a remarkable year for the Indian real estate market, especially w.r.t regulatory reforms. Through dedicated initiatives like RERA, REITs, Ease of Doing Business and Housing for All, the industry witnessed the much-needed transparency across the realty value chain, thus enabling a ripple effect on capital inflows and ensuring a strong performance by the commercial real estate sector.

“Buoyed by a positive business sentiment and robust growth driven by optimistic prospects indicative of India being the fastest growing economy globally, the commercial sector put in a very strong performance in 2018. In fact, leasing activity registered strong gains at 40-41 mn sft (before the year is over). As per Q3 2018 numbers, Year-To-Date (YTD) leasing was 15 per cent higher y-o-y and the signs of a busy last quarter are already pointing towards this year closing at 48-50 mn sft of leasing volumes, which will make this the best ever year for India’s commercial sector,” says Rohan Sharma, research head, Cushman & Wakefield India.

THE KEY TO SUCCESS:

The commercial real estate sector has been a bullet-proof choice for developers and institutional investors alike for a variety of reasons. According to Bhavin Thakker, country manager – worldwide occupier services, Savills India, here’s why the commercial real estate sector performed well this year:

CONSISTENT DEMAND;

AVAILABILITY OF GOOD QUALITY ASSETS;

GOOD UP-KEEP AND MAINTENANCE OF EXISTING DEVELOPMENTS;

CREATION AND FURTHER DEVELOPMENT OF NEW MICROMARKETS WITHIN MAJOR CITIES;

FOREIGN DIRECT INVESTMENT (FDI) IN THE REAL ESTATE SECTOR.

ÚTALKING POINTS:

The last few years, including 2018, witnessed the Indian commercial real estate sector experiencing stable demand and good quality supply, thus ensuring a lot of economic activity in this sector. “There have been large platformlevel and asset-level deals that were accomplished during the year. Not to forget, Indian office space remains the target choice for institutional investors all along, thereby driving the demand-supply chain,” says Bhairav Dalal, partner – real estate tax, PwC India.

Sharma explains, which cities fared well in the realty landscape this year:

Bengaluru, as usual, dominated leasing activity during the year, having accounted for over 1/3rd of pan-India numbers till date;

Hyderabad has also been a strong performer this year, with nearly 9 mn sft of gross leasing activity with a strong pre-leasing flavour;

Delhi- NCR showed a 23 per cent y-o-y growth in its 2018 YTD leasing numbers. Cities like Mumbai, Chennai and Pune have continued to be steady performers during the year, though Chennai and Pune have also been impacted by a lack of relevant and quality supply during this period.

The key micro-markets, which dominated are: Outer Ring Road in Bengaluru; Hitech City and Gachibowli in Hyderabad; Gurugram in NCR; Navi Mumbai in Mumbai; Eastern SBD and suburbs in Pune and Guindy and OMR in Chennai.

Source: times of india