The real estate market in India is the second-highest employment generator in the country after agriculture. Before the pandemic, many real estate experts predicted that the commercial real estate sector will be accelerated by large-scale investments by institutional investors in the upcoming years. But after a pandemic, is the situation the same? Can we expect the same growth in 2021? Let’s read what our real estate experts are talking about Commercial Real Estate Forecast 2021.
Commercial Real Estate Forecast 2021
Since 2017, the office market in India is witnessing a steady increase also in 2021. In the second half of 2019, Bengaluru witnessed the highest area of about 0.8 million square meters of new office space completions. But because the pandemic started, office space leasing fell down 46% to 25 mn sq ft.
As per the records, in 2019 net leasing hit a record 46.5 million sq ft. However, the average leasing of last year (2020) has been 31 million sq ft, but experts are expecting that demand would cross this number in 2021.
The reopening of offices will definitely increase in demand for bigger sizes of office spaces as everyone will be adopting the social distancing culture for safety. More and more developers are likely to launch offerings that provide a sanitized environment and lots of wellness amenities catering to health-conscious customers.
As per Knight Frank’s latest report, in Bangalore, we can expect the surge in prime rents but in Mumbai, NCR rental will be the same that means constants as the current situation. Also for rest areas, there are more chances of declining rent between -3% to 0%.
After the pandemic and due to government initiatives of the “Made in India” concept, we can expect a boost of commercial properties such as warehouses. Also to support the growth in e-commerce, commercial space is expected to be largely occupied by data centre investors and solution providers for the year 2021.
According to an analysis by JLL India, the data centre industry will add 703 MW capacity by the end of 2025, translating into an opportunity of 9.3 million sq ft of real estate development.
Also, This pandemic will definitely motivate the NRI’s to invest in commercial real estate. The depreciating value of the Indian Rupee against the US Dollar is one major factor. Indian real estate will be the best option for NRI’s to recover their investments.
On the other side, as vaccine adoption occurs across the country, there are chances of the normal situation but surely the process will be slow. Malls and shopping complexes will open like before with good attraction of people. Malls could see more variable based rental models being adopted by tenants as well as repurposing spaces for fulfillment centers, etc
2021 should be a year in which the commercial asset story will continue to grow and lead the recovery in the real estate sector post-pandemic.
Because of SEBI’s amendment to the rules of Real Estate Investment Trust (REITs), investors will show interest in commercial real estate investment as it can be guaranteed stable and long-term returns.
In 2021, there might be a good attraction for Fractional investment. It is a safe and feasible way to pocket-friendly investment in commercial real estate. Several investors pool in their money, to buy Grade A office property jointly. The assets are vetted legally and rigorous statutory and regulatory clearance checks are done prior to offering them to such individuals investors for ownership. It works perfectly for investor’s pockets and is expected to become a dominant investment trend in the market over the next 3-4 years in India.
As lots of ups and downs happened in 2021, the exact prediction of the real estate market will be quite tricky, the above points are based on all the real estate market expert’s expectations and considerations. Let’s connect with our OwnersTown experts for more discussion and advice for the investments. Chat with our real estate experts on Whatsapp: +91 96202 46980.