2020 has been a rather tumultuous year which has led to a massive shift in how we interact with the globe. Like a lot of other sectors, genuine estate, which is a lot beyond just buildings produced of brick and mortar and is in truth an enabler of our sustenance and well-being, is also most probably to execute differently going ahead from what we have observed in the previous.
The sector has gone by way of a roller coaster ride in 2020 and winds of alter are currently becoming observed each on the customer and developer front. Here we are taking a appear at the important trends in genuine estate which are probably to prevail in 2021:
Home Buying for Self-Consumption
The altering millennium mindset more than the final handful of years had began favouring rental residences, hence difficult the established Indian mindset of “being settled” only with property purchases.
“The pandemic is driving back that desire to own a home, especially since the need to stay close to office has reduced for many. There is an increasing tendency to move away from the populated and polluted city-centric areas to more affordable suburban locations. The more affordable cities in India will see a preference towards plotted developments or builder floors over apartments. On the other hand, in cities like Mumbai, we will see a tilt towards gated communities vis-à-vis single building developments because of the multiple advantages gated societies tend to offer,”
-says Divya Seth Maggu, Director, Valuation Services at Colliers International India.
Builder Confidence to Drive Sales
Corporate developers who have a sturdy monetary backing and brand equity will obtain a larger industry share. Stressed and weaker players have currently began divesting their assets either by way of improvement management agreements or enterprise takeovers. This trend will only get more pronounced and use of technologies to bring in efficiencies will at some point lead to superior consumer centricity and self-confidence.
Workplace Changes
This is specifically correct for IT/ITeS organizations exactly where the work-from-property model is increasingly becoming an integral component of their extended-term tactic. Business CEOs across the globe are currently searching to lessen expenses and genuine estate does turn out to be the initially target. “The trend of consolidation at one place which was being considered by companies may now get realigned to the hub and spoke model. We may thus see smaller properties being taken up vis-à-vis single large offices. Nonetheless, health and hygiene and social distancing norms would take precedence over space efficiencies and workplaces would be realigned for the post-Covid world,” says Maggu.
Foreign Investors will continue to bet on Commercial Real Estate
Foreign investment continues to be buoyant on the rent yielding asset segment. Even through the lockdown, there has been great demand from foreign investors for high quality assets in India, hence showcasing the self-confidence in the sector instance becoming Brookfield-RMZ, Blackstone-Prestige bargains which have been in the news. Similarly, from an institutional investor point of view, REITs will continue to be the important theme and we will have more REITs hitting the capital markets in 2021.
“An asset class which has been a direct beneficiary of the various changes is the warehousing and logistics sector which will continue to see significant demand from various sectors like ecommerce, 3PL, FMCG, pharma, etc and we will see a lot of traction in this space,”
-says Maggu.
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Thus, even although 2020 was difficult, the genuine estate sector has the possible and is poised to be 1 of the important drivers for supporting the general development in the economy.