India’s property engine on track


Flexspace operators will see strong demand; rental will see an uptick, according to CBRE report

Flexspace operators will see strong demand; rental will see an uptick, according to CBRE report

Despite the continued cyclical ups and downs of the COVID-19 pandemic, the Indian real estate sector has remained largely resilient. It is now showing signs of recovery, thanks to India’s strong position as the engine of the global economy as well as promising growth projections in segments such as office, I&L, residential real estate segments and alternatives.

This was highlighted by real estate consultancy firm CBRE South Asia in its “Real Estate Market Outlook 2022 – India” report released at the CII Real Estate Annual Conference – “Invigorating the Real Estate Industry in 2022 & Beyond”. The report highlights key trends and projections for the Indian real estate sector for the year 2022.

Real estate activity should pick up.

Real estate activity should pick up.

The report states, “In 2022, we expect the sector to benefit from the government’s continued focus on infrastructure development and industrial growth, with segments such as logistics and manufacturing as central nodes. We also expect ESG to transcend sectoral boundaries and become a central focus of business interests as investors, developers and occupiers integrate health and wellbeing into their strategies while improving energy efficiency. and reducing their carbon footprint.

Anshuman Magazine, Chief Executive Officer, India, Southeast Asia, Middle East and Africa, CBRE, said: “The second wave of the pandemic has been a huge blow to the Indian economy and, by extension, to the real estate sector. We have come a long way since then. Rental activity across all sectors and segments has been on the rise over the last 6 months and we expect this growth to continue through 2022. before the pandemic in terms of rental. as well as adding supply. We also expect the Indian market of alternative segments such as life sciences etc. matures further, allowing investors to diversify their portfolios and offer more investment opportunities.

Gross uptake in office space is expected to hit 45-47 million square feet in 2022, growing about 13-14% from 2021. Technology companies would continue to dominate leasing in 2022, while flexible space operators, BFSI, engineering and manufacturing, and the life sciences segment are expected to contribute significantly to the office space occupancy growth. Similar to 2021, Bengaluru, Hyderabad and Delhi-NCR are expected to continue driving deal activity in 2022.

CBRE expects approximately 51-53 million square feet of new office space to become operational in 2022, up approximately 4-5% on an annual basis.

Physical offices are here to stay, along with hybrid working; occupiers’ appetite for office expansion is growing.

Workplace strategies would evolve to accommodate the new role of the office, as it became a center for collaboration and a means to improve productivity levels.

Main trends

Unprecedented generational convergence is likely by 2030: for the first time in history, four generations would simultaneously occupy the workplace.

Proptech will lead India’s CRE transformation by 2030: Six technologies that will dominate the real estate industry in 2022 are SaaS, Artificial Intelligence, Internet of Things, Robotic Process Automation, Virtual/Augmented Reality and blockchain.

Leasing activity should remain strong in 2022 and reach 35 to 37 million square feet; growth of more than 20% on an annual basis. The continued expansion of e-commerce and 3PL (third party logistics) businesses amid macroeconomic recovery and growing online retail penetration is expected to boost the sector. Additionally, next-generation logistics facilities are likely to dominate the upcoming supply pipeline as warehouses grow.

Demand for warehousing space is expected to increase further in 2022: continued upgrading/expansion opportunities in Tier I cities, new market penetration in lower-tier cities, and expanding distribution networks premises in emerging logistics centers will contribute to this growth.

CBRE expects approximately 32 to 34 million square feet of new warehouses to become operational in 2022. The regionalization of supply chains in APAC should benefit alternative manufacturing hubs, including India.

Rent growth is expected to continue

Hyderabad, Mumbai, Ahmedabad, Chennai and Pune saw rent growth in the range of 10-20% and cities such as Kolkata, Bengaluru and Delhi-NCR saw a 2-7% year-on-year increase. We expect rental growth to continue across all cities in 2022, particularly in higher quality, technology-enhanced and strategically located assets.

Ramp-up of cold storage (CS) facilities: CBRE Research expects CS capacity and inventory in India to double between 2019 and 2023 to 70-75 million tonnes and 1.4-1.4 million tonnes, respectively. .5 billion square feet. Online Grocery, Food Manufacturing and Delivery, and Life Sciences Sectors to Catalyze Growth

Retail – On a slow but steady recovery trajectory. Although the retail recovery has been hampered by Omicron, we expect pent-up demand to drive activity across all consumer categories.

Expansionary demand is expected to strengthen this year: demand for categories such as QSRs, supermarkets, electronics and consumer durables is expected to hold.

Stores need to be multifunctional, to go beyond “pure retail”: omnichannel retail and hybrids between digital and bricks and mortar will become more visible. Stores can actually act as a solution to supply chain problems by covering the “last 50 feet”, which is the most expensive part of the logistics process.

Increased emphasis on experience: It would become imperative for retailers and malls to offer shoppers an experiential incentive to visit physical stores. Innovations such as themed stores, promotional events, expanded display areas, new F&B concepts will be key drivers.

Residential sector: On firm ground

The continued political push, an upturn in economic activity coupled with a low mortgage rate regime are some of the major factors driving residential growth. The strong sales momentum observed after the third quarter of 2020 prompted developers to launch new projects / new phases in existing projects.

Equity values ​​in the mid-to-high end segments are expected to rise in 2022 due to factors such as sales momentum and rising input costs which may require developers to pass this increase on to homebuyers. However, asset price trends are expected to remain divergent across sub-segment types and within cities as the level of unsold inventory and sales growth are expected to dictate the evolution of capital value.

Midscale and Affordable Segments to Boost Momentum: Expected traction in upscale/luxury housing categories while steady demand for homes priced between ₹45 lakh and ₹1.0 crore is likely to increase demand for affordable and mid-range segments in 2022 .

Focus on larger units and plotted developments: with remote working and home schooling likely to continue, factors such as larger homes, plotted developments with flexibility on configurations and ancillary equipment will likely remain key areas of interest for developers.


Investment activity is expected to pick up in 2022 as investors likely prefer the opportunistic route. We also expect alternative investment funds to emerge stronger going forward. Total investments in 2022 are expected to increase by around 5-10%, to around pre-pandemic levels of 2019.

Mumbai, Delhi-NCR, Hyderabad and Bengaluru are expected to remain on investors’ radar in 2022, with a focus on offices, development sites and I&L assets. With the emergence of Tier II cities as new drivers of warehousing demand, we will likely see investor demand for such space in these locations.

Growth in investment in creative assets: Given that there are a limited number of high quality/basic assets that are for sale in the market, we may see more activity via the opportunistic route as investors rebalance risk and return in the post-pandemic era.

Alternate Segments

Flexible spaces would continue to gain prominence in occupant portfolios, with new “core+flex” strategies emerging amid portfolio expansion and hybrid working.


Student/co-living accommodation is expected to see a strong upturn in activity as universities and workplaces reopen.

REIT: Operational and financial performance to witness a strong recovery; Additional REITs expected in the office sector.

Life Sciences: A paradigm shift in the dynamics of life sciences real estate has been recorded post-pandemic, leading to an increase in their office leasing share in 2021 – a trend that is expected to continue in 2022.

During the event, CII also announced the election of Anshuman Magazine as President of CII (Northern Region) for the 2022-23 fiscal year.

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