After getting hit by the Covid-19 global pandemic, the real estate sector in India is slowly recovering and on the road to resume growth. According to various analysts, the demand for real estate investments has reached the levels seen before the pandemic.
Investors are reposing faith in the real estate market. Real estate investments have seen a momentum across the Asia-Pacific, Americas, Europe, the Middle East, and Africa (EMEA). In 2022, the investment volumes are expected to reach the levels of 2021, if not surpass it.
“There has been a rapid acceleration in the number of transactions closing in third quarter, which is expected to continue well into 2022, property consultancy Colliers said in its report titled 2022 Global Investor Outlook Report.
The Indian real estate sector has remained resilient despite the headwinds triggered by the pandemic adversely impacting the economy. In January-September 2021, property investments were recorded at $3.5 billion, almost 75% of the amount in 2020, it said.
Residential, industrial and warehousing sectors are the major beneficiaries this year, taking up 36% of the investments. Office spaces are the preferred real estate investments globally, accounting for 60% of the investors. According to the report, industrial and logistics assets will be the most coveted.
“While the office will continue to remain a dominant sector, investments in residential and industrial and warehousing are likely to strengthen in 2022 aided by strong business fundamentals. Income visibility and stability, attractive valuations and identifying the dark horses will underline the investment ethos in 2022”, said Ramesh Nair, CEO, India, and Managing Director, Market Development, Asia, Colliers.
Overall, industrial and logistic assets will be the most sought-after real estate assets in the region, with more than 20% of investors anticipating capital value gains of 10%-20% in value-add I&L assets in 2022, supported by tailwinds and large-scale economic transformation.
Appetite for retail is bifurcated. Food/grocery anchored convenience assets are proving to be the most sought-after asset type across all three global regions. Recent market activity also demonstrates that e-resilient luxury-backed assets are helping to satisfy investor demand across the globe, with Australia recently witnessing some of the biggest high-end retail destination deals in its history. Activity is likely to be concentrated at these opposing ends of the retail spectrum, but with growing interest in repositioning existing mainstream retail assets that are more vulnerable to e-commerce.
“The factors that have supported strong recovery in demand (in India) are expected to remain in place for the near to medium term as well, including increasing preference for own homes as against renting, higher demand for larger homes with better amenities, as well as, improved affordability,” ICRA Vice President Mathew Kurian Eranat was reported to have said.