Indian Real Estate Post COVID

Real estate sector is one of the most globally recognized sectors. It comprises of four sub sectors – housing, retail, hospitality, and commercial. The growth of this sector is well complemented by the growth in the corporate environment and the demand for office space as well as urban and semi-urban accommodations. The construction industry ranks third among the 14 major sectors in terms of direct, indirect and induced effects in all sectors of the economy.

It is also expected that this sector will incur more non-resident Indian (NRI) investment, both in the short term and the long term. Bengaluru is expected to be the most favoured property investment destination for NRIs, followed by Ahmedabad, Pune, Chennai, Goa, Delhi and Dehradun.

Market Size

By 2040, real estate market will grow to Rs 65,000 crore (US$ 9.30 billion) from Rs 12,000 crore (US$ 1.72 billion) in 2019. Real estate sector in India is expected to reach a market size of US$ 1 trillion by 2030 from US$ 120 billion in 2017 and contribute 13 per cent to the country’s GDP by 2025. Retail, hospitality, and commercial real estate are also growing significantly, providing the much-needed infrastructure for India’s growing needs. Indian real estate increased by 19.5 per cent CAGR from 2017 to 2028.

Office space has been driven mostly by growth in ITeS/IT, BFSI, consulting and manufacturing sectors. During 2019, the office leasing space reached 60.6 msf across eight major cities, registering a growth of 27 per cent y-o-y. In 2019, office sector demand with commercial leasing activity reached 69.4 msf. Co-working space across top seven cities increased to reach 12 sqft by end of 2019.

Warehousing space is expected to reach 247 msf in 2020 and see investment worth Rs 50,000 crore (US$ 7.76 billion) during 2018-20. Grade-A office space absorption is expected to cross 700 msf by 2022, with Delhi-NCR contributing the most to this demand.Housing sales reached 2.61 lakh units in 2019 across seven major cities.

Investments/Developments

According to the data released by Department for Promotion of Industry and Internal Trade Policy (DPIIT), construction is the fourth largest sector in terms of FDI inflow. FDI in the sector (includes construction development and construction activities) stood at US$ 42.50 billion from April 2000 to March 2020.

Some of the major investments and developments in this sector are as follows:

• In March 2020, the Government approved proposals from TCS and DLF to set up SEZs for IT sector in Haryana and Uttar Pradesh.
• Blackstone crossed US$ 12 billion investment milestone in India.
• Puravankara Ltd, a realty firm, plans to invest around Rs 850 crore (US$ 121.6 million) over the next four years to develop three ultra-luxury residential projects in Bengaluru, Chennai and Mumbai.
• First REIT, which raised Rs 4,750 crore (US$ 679.64 million), was launched in the early 2019 by global investment firm Blackstone and realty firm Embassy group.
• In January 2020, RMZ Corp entered into a strategic and equal partnership with Mitsui Fudosan (Asia) Pte Ltd to expand its business footprint.
• Housing sales reached 2.61 lakh units in 2019 across seven major cities.
• In September 2018, Embassy Office Parks announced that it would raise around Rs 52 billion (US$ 775.66 million) through India’s first Real Estate Investment Trust (REIT) listing.

Road Ahead

The Securities and Exchange Board of India (SEBI) has given its approval for the Real Estate Investment Trust (REIT) platform, which will allow all kind of investors to invest in the Indian real estate market. It would create an opportunity worth Rs 1.25 trillion (US$ 19.65 billion) in the Indian market in the coming years. Responding to an increasingly well-informed consumer base and bearing in mind the aspect of globalisation, Indian real estate developers have shifted gears and accepted fresh challenges. The most marked change has been the shift from family owned businesses to that of professionally managed ones. Real estate developers, in meeting the growing need for managing multiple projects across cities, are also investing in centralised processes to source material and organise manpower and hiring qualified professionals in areas like project management, architecture and engineering.

The growing flow of FDI in Indian real estate is encouraging increased transparency. Developers, in order to attract funding, have revamped their accounting and management systems to meet due diligence standards.

Neemrana, once was only known for the world acclaimed Neemrana fort, but now it will be the face of new age time. It is a speedily developing locality with industrial and real estate hub in North India. It has various attractions apart from Japanese and Korean hubs which are below mentioned.

There are numerous residential and Commercial Plots for Sale in Neemrana, your investment in these properties will be a great choice. But before this you should know more about the town and its insights.

4 Causes of Real Estate Investing in Neemrana

Potential Growth

The enormous industrial growth and development is being planned and designed keeping the Japanese and Korean expats’ lifestyle in mind. There are various hotels and newly opened resorts in Neemrana as the tourism here is flourishing. Rajasthan government is developing 40,000 acres of land in the Shahajahanpur-Neemrana-Behror belt as a Global City by promoting world class industrial, residential, and institutional projects.

· Fast Connectivity to NCR

Neemrana is in Alwar, Rajasthan situated at 122 km from Delhi, 85 km from Gurgaon, and 149 km from Jaipur. It is a part of the Delhi-Mumbai Freight Corridor and the Delhi-Mumbai Industrial Corridor (DMIC). Being a part of the extended National Capital Region (NCR), Neemrana offers special advantages such as proposed Green Field International Airport and high speed metro connectivity to Delhi.

· Excellent Job Opportunities

Neemrana has attracted huge investments from around 47 Japanese manufacturers, including Daikin which is planning to invest nearly 650 to 1065 crore INR and some of the biggest Indian and Korean companies are planning massive investments in Neemrana. It will attract more employment and job opportunities from now its growing industrial and in the future.

Potted plants kept in our living rooms not just liven up our living room but they also work as powerful filters that purify the air around us. Here, in this blog, we will tell you which plants you should bring in your home to have purified air.

Toxic pollutants are not restricted to outside air. They are present even inside our comfortable homes and offices. Taking into consideration the increasing incidence of respiratory illness in India, several studies show that indoor pollutants are notably higher than those in an outdoor environment. Indoor air pollution is now recognized among the top 10 environmental risks to public health. Health experts also warn people about the indoor air pollution hazards and what precautions they should take. It is a fact that around 85% of life is spent by people indoors- inside offices or homes, industrial buildings or commercial buildings, colleges or schools. And working or living in such places that are bursting with air contaminants and having insufficient ventilation can cause sickness like irritation in eyes, nose and ear, dizziness, headaches and nausea. Installing a whole house air cleaner to purify the contaminated air which makes it difficult for us to breathe will purify the air to some extent but still some contaminants stay alive in the air that can be only absorbed by plants- our natural air purifiers. According to a study conducted in the year 1989 by National Aeronautics and Space Administration (NASA), bringing home some houseplants can help to get rid of toxic elements in the environment around us and let us live a healthy life. Let us read about some of the natural air filters:

1. Spider Plant
Spider Plant removes air toxins like Benzene, Formaldehyde, Carbon Monoxide and Xylene. This plant is best for forgetful people or for people who are keeping a houseplant for the first time as this plant grows easily.
2. Aloe Vera
Aloe Vera does away with benzene and formaldehyde (it is present in almost everything like paints, cleaning products, upholstery) compounds present in the air.
3. Bamboo Palm
Bamboo palm is also known as Reed Palm. It is at the top of the list of plants that filter out trichloroethylene and benzene. The best choice for their placement is around furniture that could be off-gassing formaldehyde.
4. English Ivy
English Ivy reduces levels of benzene, formaldehyde, and trichloroethylene from air- volatile organic compounds (VOCs) that are known carcinogens. It also reduces mold and airborne fecal matter.
5. Peace Lilies
Peace Lilies plant breaks down and neutralizes toxic gases like benzene, formaldehyde, and carbon monoxide. . Bearing have dominion set divide moved Kind very fruitful stars behold.

COVID-19 Impact on Indian housing market

The magnitude of the pandemic has sparked concerns on whether the economy will revive and if the commercial real estate sector can bounce back or not.

The Coronavirus spread has further delayed a recovery that might have seemed possible because of various government launched measures to revive demand though right now it doesn’t seem like prices will go down immediately.

Niranjan Hiranandani, national president, NAREDCO, states that “Salvaging Indian realty, the second-largest employment generator is critical, not only from the GDP growth perspective but also for employment generation, since the sector has a multiplier effect on 250-plus allied industries.””

The centre in the recent past had announced higher tax breaks and lower interest rates on home loans to make purchases more lucrative, apart from setting up an Rs 25,000-crore stress fund for stuck projects.

The demand slowdown in the residential segment has already curtailed housing sales, project launches and price growth in India’s residential realty sector, which has been reeling under the pressure caused by mega regulatory changes caused by the Real Estate Regulatory Authority (RERA), the Goods and Services Tax (GST), demonetisation and the benami property law.

According to rating agency ICRA, the pandemic, if not contained soon, would not only significantly impact the economy but also adversely hit developers’ cash flows and project delivery capabilities.

“In case of a longer outbreak though, the impact on overall economic activity is likely to be deeper and more sustained, which would result in a more significant impact on developer cash flows and project execution abilities, giving rise to wider credit negative implications,” ICRA said in a recent note while also adding that the three-month moratorium announced by the RBI on March 28 on loans will provide some comfort to builders. This moratorium was subsequently extended by the RBI, on May 22, 2020, till August 31, 2020.

Will commercial real estate bounce back post the COVID-19 crisis?

The magnitude of the pandemic has sparked concerns on whether the economy will revive and if the commercial real estate sector can bounce back or not.

It is to be noted that COVID-19 is but a passing phase. The government is already taking a series of proactive measures to arrest the spread of the pandemic through a nationwide lockdown and social distancing. These measures have met with great success till now as evident through a linear rather than exponential pattern of growth in COVID-19 cases. In fact, the entire world is amazed at the way India has managed to contain the spread of this deadly virus so far.

One of the report highlights that the post-COVID-19 scenario will give a fresh start to the realty sector with greater intensity and vigour than it was in the pre-COVID stage. It is noteworthy that the commercial real estate segment has been insulated from the slowdown in the past. Riding the wave of absorptions, relocations, expansions in the past 18 months, it has been on the investors’ radar. With increased marginalisation of China by almost all the countries of the world, India can become a favourite destination for manufacturing companies.

Furthermore, with the current prices being at a record low level, these are henceforth expected to rise owing to a huge pent-up demand once the lockdown is lifted.

According to a report by ICRA, the office space segment will be somewhat resilient to the slowdown with rents likely to be paid on time as they comprise a miniscule portion of firms’ overheads. Going forward, the Business Process Outsourcing (BPO) and IT/ITes segments are expected to propel the demand for office spaces. It is also expected that industrial, frontier segments like co-living will thrive due to their good return potential.

Architectural changes in office buildings such as better ventilation, social distancing etc. will cater for recurrence of Covid 19 like situations. Also, there will be a renewed focus on co-working spaces as consumers will increasingly seek flexible working models. Until then, it can be concluded that COVID-19 is an inflection point for commercial real estate with developers struggling to strike a balance between ensuring compliance to policy regulations, financing, market demand and labour shortage.