Commercial real estate to register promising growth in second half of 2021

ANI |
Updated: 08/04/2021 5:20 PM IS

New Delhi [India], August 4 (ANI / NewsVoir): The second wave of coronavirus has set the real estate sector, including the residential and commercial segments, back.
However, this time the developers were better positioned than last year and due to the better preparation, the effects of COVID were limited.
Cases are receding along with a gradual surge in economic activity and commercial real estate is now growing rapidly. Developers are confident that the segment will see promising growth in the second half of 2021.
“The lifting of travel restrictions, the extension of business hours and a revitalization of the demand for food and beverage outlets as jobs reopen have boosted commercial real estate. From an investment perspective, commercial properties will continue to be geared towards investors. ”’Radar due to the lucrative and stable earnings potential. The latest REIT listing will further boost sentiment and increase the segment’s liquidity. Driven by the recovery in business and prospects for economic stability, real estate is expected to grow more rapidly during H2 2021, “said Ravish Kapoor, Managing Director of Elan Group.
Driven by the IT / ITES sectors, the demand for commercial space in large cities is increasing sharply. A recent JLL report said India’s net office absorption was 4.39 million square feet in the second quarter, up 32% year over year. “With the rapid improvement being driven by the efficacy and availability of a vaccine, the ingrained prospects for commercial real estate look positive in many ways.

This is mainly due to the increasing number of IT / ITES, BFSI, startups and boutique companies. In addition, large companies are rethinking their plans to bring their employees back to the offices. This will increase the demand for Grade A offices, flexible / hybrid office space, and others. The increase in economic activity will gradually determine the pace of retail growth and demand for retail destinations such as stores, malls, etc. will increase, “said Pankaj Bansal, Director, M3M.
Companies are increasingly hiring new employees, which further drives the demand for total letting of high-quality office space in the top cities. According to a recently released Anarock report, the top 6 cities have 7,400 90 million square feet of office leases up for renewal in 2021. Businesses are now accelerating their operations and the demand for office space will increase in 2022 and 2023.
“Investors with a deep understanding and knowledge of market behavior find the commercial real estate segment a better option than others. The segment has performed significantly better than residential real estate in terms of ROI in recent years. The gross rental volume increased to 14.7 million sq. ft. in the third quarter of 2020, a whopping 138 percent increase over the previous quarter. Popular locations such as Noida are gaining importance due to their proximity to the state capital and the presence of modern commercial space, and economic activity will gradually determine the pace of retail growth, “said Abhishek Pandey, Vice President-Customer Engagement & Distribution, Viridian RED.
The shopping malls have opened and the increased footfall has led to an increase in the demand for F&B and the increased spending is leading to a rapid recovery. “The second half of the year looks promising for both the office and retail segments. PEs have shown a keen interest in the office and retail segment and thus signal a stability in this asset class for the future. While an immediate reversal in demand is unlikely in the future, vacancy levels are expected to decline in the coming quarters as physical offices resume and visitors flock to malls. Recent reports have indicated consumers’ intention to increase their discretionary spending, “said Siddharth Katyal, Director (Planning & Strategy), Omaxe Ltd.
In addition, during these volatile times, commercial property has also proven to be a safe investment option, attracting investors looking for guaranteed higher returns. “Commercial real estate usually has an annual return on the purchase price of between 6% and 12%, depending on the region, the current economy and external factors (such as the pandemic).
This is a much higher range than normally exists for single family homes (1% to 3% at best). The segment is inherently the best choice for investors looking for secure growth in places like Gurgaon, which are home to global IT companies and corporations; The pandemic has tended to accelerate the need to adopt innovative tools and applications to keep the industry going, “said Navdeep JP Sardana, founder and chairman of WhiteLand Corporation.
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