There is optimism in the market about a stronger economy, and expectations of the government ushering in reforms, says Anshuman Magazine, CMD, CBRE South Asia.
The year’s real estate investment forecast also indicated an improvement due to government stimulus efforts, according to the report by CBRE. Institutional investments and capital market transactions in the realty market during the year stood at approximately $ 5 billion. Of this, land and development stage transactions attracted the highest investments from domestic as well as foreign entities. The commercial office segment, meanwhile, attracted more than 25% of this total investment.
Office spaceThe spurt in office transactions during 2014 led to a total corporate space take-up of more than 33 million sq. ft., a year-on-year increase of about 10% over 2013. This was led for the most part by Bangalore and the National Capital Region (NCR). Corporate real estate take-up in the fourth quarter reached 9 million sq. ft, the highest quarterly levels over the past 3 years. Overall, the year saw significant investor interest in completed and well-leased core commercial assets and IT parks.
Housing marketHousing demand across key residential markets remained subdued in the first half of 2014. Owing to high pricing and lending rates, buyers preferred secondary and emerging markets of leading cities. The general slackness in residential sales was primarily triggered by the Affordability Index going down in certain cities.
Retail real estateAccording to the CBRE report, “The New Age of the Asia Pacific Retail Market,” India is slated to be in the top 10 global markets for retail consumption demand by 2020. To take advantage of this opportunity, international retailers —predominantly fast fashion brands — are continuing to enter and expand across India’s market places.
Recent trends indicate that global retailers expand into secondary cities such as Jaipur, Chandigarh and Kochi after establishing their presence in Delhi NCR, Mumbai and Bangalore. The construction of new, high quality shopping centres in such locations, therefore, will provide more options to global retailers seeking pan-India expansion. In terms of retailer types, mass market brands and mid-range fashion brands are expected to look towards our markets for expansion in 2015.
OutlookThe factors most likely to impact the real estate market are stronger and sustained GDP growth; more relevant reforms, such as the recent amendments made to the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013; and the paring of interest rates.
