After three post-pandemic years of an upcycle, it was a mixed bag for the realty sector in 2025, with sales volumes in the residential real estate moderating across top cities, and commercial real estate and institutional investments emerging as standout performers. Residential: Volumes soften, value holds firm.
Currently, India has five publicly listed Reits: Brookfield India Real Estate Trust, Embassy Office Parks Reit, Mindspace Business Parks Reit Nexus Select Trust, and Knowledge Realty Trust.
Institutional investment in real estate jumped nearly 9-fold during the April-June quarter to $1.35 billion, mainly driven by the inflow of funds in the warehousing projects, according to property consultant JLL India. In its 'Capital Markets Update Q2 2021', JLL India reported that institutional investors deployed $1,357 million in real estate during the second quarter of the 2022 calendar year as against a mere $155 million in the year-ago period.
Office space owners are looking at good times ahead as rentals are expected to rise due to demand for Grade A office spaces outpacing supply that has been sluggish due to construction delays, long gestation periods and developers' interests shifting to residential.
Data centres are increasingly becoming a key part of the real estate landscape, as reality firms - with rich expertise in land acquisition, construction and dealing with government approvals - are seeing them as opportunities to build long-term assets with continuous revenue flow.
Institutional investments in real estate may fall 20 per cent to $4 billion during this calendar year because of a higher inflow of funds in 2020, according to property consultant JLL India. During the January-September period, the institutional investment rose to $2,977 million from $1,534 million in the year-ago period. "Unless some large portfolio deals are not inked at the end of the year, annual investments are expected to be in the $3.8-4 billion range in 2021," JLL said in a statement. Institutional investments managed to cross the $5 billion mark in 2020 due to large portfolio deals worth $3.2 billion during the last quarter of the year.
JLL had shortlisted over 10 developers and Embassy was selected after a long due and rigorous process of due diligence.
Net office leasing rose by 8 per cent to 5.85 million square feet in the July-September period of this calendar year across seven cities on better demand from corporates and coworking operators, according to JLL India. Property consultant JLL India attributed the rise in net absorption to various factors such as better awareness about coronavirus, preparedness along with mass vaccination drive and unlocking of economy has aided in the revival of the office market. Net absorption or leasing includes fresh leasing in completed buildings and pre-commitments in buildings that become operational during the time being reviewed, and excludes exits/terminations, churns, renewals, and pre-commitments in future supply.
Enquiries indicate it belongs to an industrialist with links to a prominent cricketer.
Hyderabad is perhaps one of the most affordable cities among all tier 1 cities of India.
Net leasing of office space rose 32 per cent year-on-year to 4.39 million sq ft during April-June period across seven major cities, but fell 16 per cent compared to the previous quarter because of the second wave of COVID-19 pandemic, according to JLL India. The net absorption of office space fell 19 per cent to 9.63 million sq ft in the first six months of this year, the property consultant said. The seven cities tracked by JLL India are -- Delhi-NCR, Mumbai, Bengaluru, Pune, Kolkata, Hyderabad and Chennai.
"Property prices are sub-set of demand. We do not foresee any negative impact on demand. Hence, the prices will not come down," Jones Lang LaSalle India (JLL, India) Chairman and Country Head Anuj Puri said, when asked about the likely impact of housing finance scam on property demand and prices.
Leasing activities of office and retail spaces would not be affected much.
Rentals for office space in Mumbai rise around 5-10 per cent, says a survey.
CREDAI-MCHI, a body of developers in Mumbai, has pegged the drop in sales booking at around 80 per cent in the February-March period this year. This is the second highest fall in residential sales in the past five years, after Q1, 2017, when the decline, due to the note ban, was 37 per cent.
The Q3 office rebound growth was led by Bengaluru and Hyderabad, which together accounted for nearly 80 per cent of the net absorption in Q3.
REITs, a new investment avenue in India on the lines of one in developed markets like the US, UK, Japan.
'Some buyers believe prices may correct in the future.' 'This is unlikely. Many developers are increasing prices amid strong sales and inflationary trends.'
The rise of the mall in India, at a time when many in the United States are becoming debt-ridden white elephants.
7.8 million square feet of mall space is under construction this year, the highest ever since 2011.
Not just mid- and small-sized firms, even big ones will either sell group companies or stakes in their listed entities to tide over crisis; more sell-offs seen in coming months.
Budget has proposed an additional deduction of Rs 1.5 lakh for interest paid on loans borrowed up to end-March, 2020 for purchase of an affordable house, valued up to 45 lakh.
Government officials be under confusion.
Housing sales are likely to be hit, especially in affordable and mid-income categories, following the RBI's decision to hike repo rate, according to real estate developers and consultants. However, the impact of RBI's decision to raise the benchmark lending rate by 50 basis points to 5.40 per cent is expected to be for a short term, they added. This is the third consecutive rate hike after a 40 basis points and 50 basis points increase in May and June, respectively.
this move by the government is likely to iron out the current challenges for the NBFCs and in turn help the real estate sector.
The sector's performance in delivery also saw a decline -- only 23.5 per cent of the committed units were delivered during the first six months of this year, show data from research firm PropEquity.
The jewellery industry has welcomed the government's decision to ban old Rs 500 and Rs 1,000 notes, saying gold demand will rise as people will have more faith in the precious metal than the currency notes. But the unorganised builders and secondary (resale) property market would be adversely impacted.
Projects in Delhi-NCR, delayed by a much as 6-7 years
Most players are looking to invest anywhere between $500 million and $1 billion in new ventures in the next couple of years, said experts on this segment.
Effects of the new schemes launched under the Pradhan Mantri Awas Yojana would be felt more in tier-II and tier-III cities, as not many budget or affordable housing projects are in the works in metropolitan cities.
Hailing clear majority for Narendra Modi-led BJP in the polls, real estate experts on Friday said a stable government at the Centre will help revive the property market.
At a time when capital allocations to real estate are growing globally, investors are expecting transparency standards in real estate to be at par with other asset classes, says Anuj Puri.
They sought further cut in interest rates as well as reforms.
RBI, in its first bi-monthly monetary policy statement, left the short-term lending rate, or repo rate, unchanged at 8 per cent and the cash reserve ratio static at 4 per cent.
Construction costs would be reduced to some extent and this benefit can be passed on to the customers, thereby spurring home buying
Consolidation is happening because of a prolonged slowdown in residential sales which has also brought down the business of brokerages.
The real estate industry today hailed the RBI's decision to cut key interest rate, saying the move will boost housing demand and also improve sentiments in the sluggish property market.
Realtors split on possibility of price fall, gold may replace cash in secondary deals.
Realty sector is facing a huge slowdown for last 3-4 years, leading to a significant delays in possession of flats to customers.
Top 10 cities in the JLL index are Bengaluru, Ho Chi Minh City, Silicon Valley, Shanghai, Hyderabad, London, Austin, Hanoi, Boston and Nairobi.
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