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Investments into the real estate sector in 2019 are expected to be about $6.5 billion — office space investments garnering the highest share.
Colliers International in its report ‘Seizing opportunities: Making CRE agile in a dynamic business environment’ released in Bengaluru said investors, both foreign and Indian, are buoyed by the commercial office sector, which is witnessing robust office demand.
Investors are looking to bundle up assets and list them as REITs, capitalising on the robust demand. “In 2018, we noted gross absorption of about 50 million sq ft across major cities in India. Apart from the mainstream real estate assets, we believe that alternative asset classes such as student housing and co-living see increased traction from investors. We believe that these alternative housing models can, in a way, assuage the slowdown in the residential market,” the report said.
Disruptions taking place
“In an ever-changing world, where there are several disruptions taking place both locally and globally, the ability of the CRE sector to adapt to change and overcome challenges, is an indication of just how agile businesses are. Only those businesses that move with the changing socio-economic and political environment will be able to survive and perhaps thrive,” Nimish Gupta FRICS, Managing Director, South Asia, RICS.
“The Indian market is in a slowdown, with the residential sector most impacted. While we don’t have a full-blown recession currently, as we did back in 2008, the impact on the CRE market though not currently felt, will only be determined on how deep the slowdown spreads. Additionally, there are factors such as adoption and use of technology, changing occupier requirements and focus on wellness and experiences that are forcing developers and employers to rethink strategy and facilities. This RICS – Colliers report sets the tone of what’s changing, and how CRE may continue to be the bright shining star of the built environment sector,” added Gupta.
“The next decade will usher in new formats of workplaces, with landlords emerging as wellness creators, where occupiers amalgamate workplaces and technology to increase productivity at workplaces,” said Ritesh Sachdev MRICS, Head of Occupier Services, India and Managing Director, South India at Colliers International.
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