The realty estate sector is one of the highest employers after agriculture and it accounts for about 6% of the economy. This sector projects and forecasts to contribute 13% to the economy by the end of 2025 provided all the norms and reforms perform well. This sector is intertwined with other sectors. After the financial crisis faced by the sector in 2008 followed by the RERA and GST reforms, the liquidity in the banks was improving with buyer’s confidence restoring gradually. Things were normalizing for this sector until the pandemic started its wrath in India. The blitz of COVID in India had a very devastating effect across the whole economy, however, it will not thwart the appeal of its commercial property. There has been a short-term blip across the whole economy. Bearing the blow, the realty market takes the toll, maturing at the same time becoming resilient than ever with new strategies and reforms in its operational activity. However, with the introduction of vaccines, there has been hoping and positivity with regards to normalcy. The room for growth for Asia’s third-largest economy with a huge inventory of properties is positive. Everyone must evolve and adapt, preparing for the new normal.
A study by Cushman and Wakefield shows that the net absorption of commercial spaces in the main Indian cities had reduced by 54% in the year 2020. However, this year presents an optimistic growth rate which is expected to rise by 29% this year. The Indian real estate is now more ready for the new normal being more resilient and adapting with the change. The change was much needed in the Indian corporate landscape because it lacked transparency and had poor governance especially with the advent of Reit (Real-estate Investment Trust) which has set new standards, boosting the market liquidity.
The Indian market is mostly unpenetrated when it comes to the relentless rise of online shopping which has caused damage to the retail sector in other countries like the US and the UK. The tax overhaul levied in the year 2017 had scrapped the patchwork of state, turning India into a single market. This reform turned out to be a boon for Indian logistics where the warehouses emerged as the most popular asset. Additionally, the advent of e-commerce has skyrocketed the investment in logistics assets across the globe. However, the Indian market has greatly benefited evermore with the implementation of the national tax.
The pandemic has affected the buyers buying patterns and preferences in terms of real estate. Customers are now looking for larger layouts with higher safety in the Residential flats in Chandigarh and other places across India. The real estate company in Chandigarh that is offering such a requirement is VRS Group who has now come up with its upcoming commercial projects in Mohali and other residential projects in Mohali. The new commercial project in Mohali by the VRS Group are satellite offices that have larger layouts with captive amenities and safety.
Satellite offices will be absorbed must faster in the non-conventional micro-markets in the commercial real estate market. With the advent and widespread implementation of work from home across various sectors, the office spaces will have a better absorption once in the Q2 and the other half of the year if the number of infections is minimized. The increased FDI other government reforms give a positive indication of the recovery of commercial real estate. Ignoring the short-term disruptions the commercial real estate has garnered quite a good traction with occupiers and investors seeking the long-term goal. One can expect the influx of investment in the commercial realty sector which will offer lucrative returns in contrast to other investment options.
The Indian commercial market has performed well even on the brink of the virus outbreak considering the damage it had taken post covid. With the current vaccination program, the economy will be on the track in near quarters. In conclusion, with the blip in economy and reform policies stimulus, this sector will have a positive outlook this year. It is safe to assume investing in commercial real estate because of the better customer sentiments after the vaccination. This will promote the shift to a new normal.
