The commercial looks promising in the second half of 2021

Likewise, the economy is returning to normal with greater vigor, since more than 24% of the country’s population has received at least one dose of vaccine. The country’s GDP growth rate increased to 1.6 percent in the first quarter of 2021 from 0.4 percent in the fourth quarter of 2020, indicating a gradual recovery. The real estate sector, particularly the commercial component that can be considered the backbone of economic activity, has also started to show signs of recovery.

The industry has been working overtime to meet the demand for commercial properties across the country. According to research by JLL, gross lease volume increased 138 percent qoq to 14.7 million square feet in the third quarter of 2020. “In 2021, the Delhi-NCR leasing market is projected to grow between a 20 and 25 percent, with most of the activity in the second half of the year. Demand is expected to be driven by tech, BFSI, consulting and manufacturing occupiers. The Delhi-NCR region has a supply pipeline of 8.5 million square feet, with Gurugram likely completing more than half and Noida the remainder, ”says Sachin Gawri, founder and CEO of Rise Infraventures Limited.

Increased shopping center opening hours in various locations, a resurgence in demand for food and beverages, and increased spending contributed to the rapid recovery that began after the third quarter of 2020. Due to its potential for growth and Guaranteed economic returns, commercial real estate will continue to be the preferred choice of investors. “Since last year, especially after Covid 2020, we have witnessed a huge jump in demand for commercial projects in Noida. And once again in 2021. After the initial shocks of April and May, economic activity in all sectors began to accumulate in June 2021, due to the decrease in infections and the moderate relaxation of lockdowns, which are fundamental to boost employment and income stability. The fact that people have started looking for real estate to stabilize their financial situation is a source of optimism, ”says Ajendra Vikram Singh, vice president of sales for Spectrum Metro.

Commercial real estate is proving to be a much more tempting investment option for individual and institutional investors. Private capital inflows into the commercial market have been increasing; According to an analysis by Savills, the first half of 2021 saw roughly 41% of observed investment inflows in the full year 2020, indicating that investor confidence remains high. “In the first half of 2021, the office lease was reduced to a minimum of six years. However, with the increase in vaccination coverage and economic activity slowly returning to normal, the second half looks promising for both the office segment and the retail segment. Public companies have shown great interest in the office and retail segment, indicating stability in this asset class going forward. While an immediate reversal in demand is unlikely in the future, vacancy levels are expected to drop in the coming quarters as physical offices resume and visitors flock to shopping malls. Recent reports have suggested consumers’ intention to increase discretionary spending, “says Siddharth Katyal, director (planning and strategy) at Omaxe Ltd.

Although 2021 may not be immune to the effects of the pandemic, the foundation for a recovery across the industry has already been laid. “Recent Indian REIT listings are projected to boost developers’ ability and desire to create more commercial properties, resulting in increased liquidity inflows in the commercial real estate asset class. Collections from existing leases remained largely intact, with no significant difficulties in collecting billed rents. The situation after this unlocking is different, as the offices will continue to operate after vaccination and are more likely to follow the COVID protocol to avoid further business disruptions. As a result, we anticipate strong leasing activity in the last six months of the year, ”says Uddhav Poddar, MD, Bhumika Group.

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