Housing sales jumped nearly 46% QoQ to 50,000 units in Q3 2021 and sales rebounded significantly by approximately 86% YoY on a year to date basis.
Led by sustained attractive mortgage regime and government incentives, housing sales jumped nearly 46% QoQ to 50,000 units in Q3 2021 and sales rebounded significantly by approximately 86% YoY on a year to date (YTD) basis, according to CBRE South Asia Pvt Ltd’s ‘India Market Monitor – Q3 2021′ report.
As per the report, office leasing activity reached 13.5 million sq ft in Q3 2021, growing at about 140% QoQ, with the YTD number reaching 25 million sq ft for the key cities. With 3PL and E-commerce fuelling demand, the Industrial & Logistics leasing activity crossed 9 million sq ft in Q3 2021, growing at about 6% QoQ and touching 23 million sq ft for 9 months 2021.
Commenting on the same, Anshuman Magazine, Chairman & CEO, India, South East Asia, Middle East & Africa, CBRE, said, “India’s real estate market has proven to be extremely resilient over the last year. The overall outlook for the Indian real estate continues to be positive – back of an accelerated vaccination drive, policy reforms, and increasing urbanization.”
Abhinav Joshi, Head of Research – India, Middle East & North Africa, CBRE, said, “With ease of restrictions post-COVID’s second wave, the real estate industry has witnessed steady growth. The green shoots of recovery have been observed across sectors – including office, residential, retail, and industry & logistics — which is likely to sustain momentum for the next few months.”
Sustained attractive mortgage regime and government incentives led to strong sectorial recovery:
# Pune led housing sales in Q3 2021 with 33%, followed by Mumbai (23%), Bangalore (17%) and Hyderabad (13%).
# At 47% and 31%, mid segment and affordable/ budget respectively were the dominant growth driver of sales in Q3 2021.
# New project launches jumped by nearly 37% QoQ to reach 48,950 units in Q3 2021.
# Mid-end and affordable segments to continue driving sales; state government incentives and an enabling mortgage regime to reinforce upward momentum.
# Rental housing to get a boost post the implementation of the Model Tenancy Act, thereby creating an alternate asset class for developers; fillip expected for co-living and student housing segments.
# Increased appetite from millennials and first-time home buyers; larger unit sizes and plotted developments to gain momentum.
# Project execution capabilities and cashflow management would be critical; stress funds to witness increased traction.
# Appreciation of commodity and asset prices as well as hardening of interest rates – key risks that could limit growth in sales.
Recovery strengthened as occupier decision making picked up. Supply addition in Q3 2021 touched nearly 13.5 million sq. ft. growing by about 30% QoQ:
# Small- to medium-sized deals (up to 50,000 sq.ft.) dominated space take-up with a share of almost 80% in Q3 2021.
# Hyderabad, followed by Delhi NCR and Mumbai, dominated supply, with a combined share of 84%.
# Hyderabad, Bangalore and Mumbai closely followed by Delhi-NCR led demand and accounted for over 80% of total absorption.
# As mobility improves and a comeback to the physical office environment picks up, overall absorption is expected to grow.
# As occupiers recognise the significance of the physical office as a centre for collaboration, connection and culture; a shift in workplace design is likely with more allocation to ‘we’ space over ‘me’ space.
# Occupiers are expected to incorporate more flexible spaces while re-optimising their portfolios with the realignment of ‘core + flex’ themes.
# Despite an increased appetite for hybrid work, the frequency of remote working is anticipated to be low (such as once a month); occupiers are also likely to determine their remote working eligibility post ‘return-to-office’ strategies.
# Developers are expected to enhance existing assets through better amenities, sustainability and health & safety measures, technological upgradation to improve occupancies.
# Investors are expected to take note of strong occupiers’ expansion intentions and monitor working patterns in their assets I portfolios; office assets to continue to remain high on the investor radar.