With increasing residential sales, industrial genuine estate has also began displaying sings of revival, which is certainly great news for the realty sector.
According to a JLL India report, when the unlocking approach was initiated in the third quarter of 2020, each the residential and workplace markets began displaying promising indicators of revival. As organization activities resumed with the gradual opening of the economy in the third quarter of 2020, the workplace industry witnessed green shoots of recovery. Sentiments enhanced additional in the final quarter of 2020 with the news of prospective vaccine improvement, and the workplace industry continued its recovery momentum. Net absorption enhanced by 52%, though new completions grew by 39% when compared to the preceding quarter.
Industry authorities say that industrial leasing activities have picked up momentum in the ongoing quarter and even just before, even though they are however to return to the pre-COVID-19 levels. The reality remains that lots of IT/ITeS organizations have extended the WFH (work from residence) solution for their workers (lots of up to June 2021) and are very carefully gauging the scenario.
“We all know that the IT/ITeS sectors are the prime drivers of overall leasing activity in the top cities. While many of the large companies did renew their office leases last year despite rising COVID-19 cases, there were others (such as start-ups) who went on to cancel theirs. With rising cases and the anticipation of another lockdown in some of the top cities, commercial leasing activity may walk the tightrope for a while longer. There is likely to be subdued demand in the near future, or at least until COVID-19 cases begin to subside in more significant numbers,” says Anuj Puri, Chairman, ANAROCK Property Consultants.
While the vaccination drive across nations and in India is gathering pace, the existing second wave and the possibility of a third wave in distinct nations are also a bring about of concern.
In reality, lots of European nations have once more gone into total lockdown, which may well have some adverse effect on industrial leasing in India. Business travel across the globe has nevertheless not resumed and is unlikely to in the close to future. All these aspects do not bode also nicely for general leasing in the brief term.
“Individually, the rising Covid cases in top cities like MMR and Bengaluru – the markets with highest commercial demand – followed by the possibility of another lockdown will dampen commercial leasing activities. That said, the overall commercial real estate story remains robust in India. We are witnessing a once-in-a-century phenomenon, which is nevertheless a temporary one. All commercial markets in the affected countries came back very strongly after the last pandemic in 1921,” informs Puri.
Developers are also of the view that genuine estate retail leasing has noticed an uptick in the final couple of months.
“The April-September 2020 period saw an exodus of brands from malls across India and drove down the rentals. However, an increase in consumer spending witnessed during the festive season has sustained itself, thereby leading to renewed optimism from both shoppers and retailers. Brands have begun to return to those malls/high streets that have the potential to attract footfall. The lack of quality malls in Faridabad, for instance, saw shoppers veering towards Omaxe World Street – a themed high-street destination with plenty of open spaces. This high-street destination has seen increased footfall and retailers’ attention in the past few months with daily footfall averaging 10,000 since December and more than 20 brands opening their stores,” says Benu Sehgal, President-Retail, Omaxe Ltd.
The pandemic-induced lockdown and the resultant WFH did hit the genuine estate leasing industry badly. However, in 2021 genuine estate leasing industry is coming back with a bang.
Gurpreet S Ratra, Executive Director, T and T Realty Sevices, says, “Rentals have corrected by 15-20% in NCR. Developers are offering custom-made solutions and tempting offers to the prospect tenants like complete furnished premises and telescopic rents. Corporate houses are capitalising the opportunity and relocating in bigger space by paying almost the same rentals. Economy recovery looks brighter. The Sensex has crossed the 50,000 mark and GST collections show upward signals. February 2021 GST revenues are 7% higher than the GST revenues in the same month last year. As per recent reports, exports from SEZs reached Rs 7.96 lakh crore (US$ 113.0 billion) in FY20 and grew ~13.6% from Rs 7.1 lakh crore (US$ 100.3 billion) in FY19. Such figures are boosting the confidence of corporate houses to roll out their expansion plans.”
Mukul Bansal, Director, Motia Group, says, “India’s commercial real estate segment is looking strong in 2021. In recent months, the Tri-city region has witnessed transactions by big companies which have boosted the market sentiments. In a post-pandemic phase, emerging new trends including a sanitized ambience amalgamated with wellness facilities to ensure hygiene and safety will become the foremost priority of developers and occupiers. Today, technology has taken the centre-stage in the realty business and has transformed business strategies. These trends are likely to stay here for a longer time as more and more players will look forward to adopting technology-driven methods for sanitization and hygiene-related concerns in office spaces.”