Ever since the concept of Work From Home (WFH) was introduced after the first lockdown, the commercial real-estate market was hit the hardest since a major number of offices in the IT implemented the work from home strategy and startups haven’t renewed their respective leases. A slight hope of revival existed as some offices had started working as they used to pre-pandemic but since the peak of second-wave, major cities in the country went under lockdown inevitably and hence the revival of the commercial real estate market may take more time than expected as 2020 was the most uncertain year of this century but 2021 has potential for better days for the market. The net leasing of office spaces in India dropped by about 50% since 2020. The office subdivision claims about 81% of the share, the warehousing subdivision at 10% and the residential with 9% of the total market.
How is commercial real-estate coping?
The real estate sector in India is predicted to contribute nearly 13% of the country’s GDP by 2025. In the commercial property market, retail, and hospitality is also growing significantly, providing the much-needed infrastructure for India’s growing needs. It is predicted that the commercial real-estate sector will be accelerated by large-scale investments by institutional investors. in the upcoming years. The commercial land sector within the country has been greatly boosted by government initiatives like Make in India and other reforms within the realty sector like the introduction of the important Estate regulatory agency (RERA) and GST. Despite their initial troubles, developers and buyers have now hailed the move thanks to the resulting transparency and competence of the world which has attracted increasing amounts of foreign direct investments (FDI) in commercial estate.
With reference to the commercial land segment, REITs also are expected to extend demand in sectors like manufacturing and IT-related institutions, thanks to better pricing and growth opportunities. The move is predicted to fuel further growth and development within the overall land market in India, as they assist developers reduce the strain of elevated capital costs involved in funding projects.
Changing trends & preferences in the commercial real estate category
In a post-pandemic phase, emerging new changing trends includes a sanitized ambience amalgamated with wellness facilities to make sure hygiene and safety will become the foremost priority of developers and occupiers. Today, technology has taken the center-stage within the realty business and has transformed business strategies. With tremendous improvement in the marketing strategies, developers now provide virtual tours of the respective projects to minimize the physical presence and these trends are likely to remain here for an extended time as more and more players will anticipate adopting technology-driven methods for sanitization and hygiene-related concerns in office spaces and distributed office timings are a must and companies have started respecting and adapting these preferences.
The growth of co-working spaces has rapid within the country, with the segment accounting for around 13% of the entire office transactions in 2019 from 5% in 2017. Small start-ups also as large IT players are finding this a beautiful model. Going by the acceptance of this model, demand for shared spaces is additionally likely to collect further momentum within the upcoming years.
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