Residential sector investment was US$420m in first nine months
The industrial space segment in India is likely to see investments inching towards US$1 billion in 2021, led by large global investors buying ready and greenfield warehousing projects, according to Colliers.
Since last year, investors have been exploring industrial space. While data centers gained traction in 2021 from developers and investors, the year also saw the maiden investments deal in the life sciences sector.
“Despite a devastating second wave, investments into the real estate sector have been unwavering, especially from global investors. Interestingly, investors are also betting on new-age sectors like life sciences and data centres,” Vimal Nadar, Senior Director and Head of Research, Colliers India, said on 28 Dec 2021.
“As per a recent Colliers survey, industrial and logistics assets will be the most sought-after real estate assets in the APAC region, with more than 20% of investors anticipating capital value gains of 10%-20% in value-add assets in 2022, supported by tailwinds and large-scale economic transformation. This shows the immense potential.
“Moreover, the centre’s new warehousing policy has the potential to transform the warehousing sector to make it more competitive. Overall, the sector’s resilience and growth will give way to more innovation next year, in accordance with the changing times we live in,” said Nadar.
Overall, the real estate sector will see stakeholders pivoting to different models, resetting to the new way people work, live and entertain. Developers, investors and buyers will work towards bringing in sustainability and cutting carbon emissions.
The market will also see gains from sectors such as Electric vehicles, solar panel manufacturing, etc in the coming years, said Colliers.
Residential segment saw strong recovery gains led by government stimulus, market-led price discovery and new demand. Investment volumes in the residential sector made a comeback in 2021.
In the first nine months of the year, investments in the residential sector stood at US$420 million, surpassing the volumes seen in the whole of last year, according to Colliers.
Investors are seeking a buy-in in the asset class, especially in the near-completion stage. Investments are spurred by renewed residential demand, led by a higher inclination to own homes, low home loan rates and steady prices, it said.
India’s office sector is coming out of the woods, with demand back to pre-record levels, and 2022 will even be better, even if marred by the new Covid-19 variant, said Ramesh Nair, CEO, India and Managing Director, Market Development, Asia, Colliers.
“We have now learned to live with uncertainty. Gross absorption in 2022 should be about 15-20% higher than this year as occupier confidence is back in the market. In terms of global capital chasing real estate, the office will continue to remain a dominant sector, but residential as well as industrial & warehousing will strengthen in 2022 aided by strong business fundamentals,” said Nair.
From the second half of 2021, technology players and flex space operators have been taking large spaces. Occupiers who had earlier focused on renewing deals are now looking at new leases. As employees return to the workplace, next-generation offices replete with health and wellness features are a top draw for occupiers.
“The year 2021 was a watershed moment for India’s real estate sector. Even when the going was tough, the sector not only remained resilient but also emerged stronger than expected,” he observed.
Flex workspaces are leasing spaces backed by occupiers’ back-to-work plans and pre-commitments. Flex spaces have come to the fore after a gap of a year, to occupy a significant share in leasing at 16-18% in 2021.
Total flex stock in metro cities is likely to rise to about 40 million sq feet in 2021. Tier-II cities are witnessing increased growth of flex spaces. Flex spaces stock in tier II cities is estimated to have grown more than two-fold this year to 5.5 million sq feet, according to Colliers. fiinews.com
