Commercial real estate is expected to recover the post-COVID-19 situation with innovation due to its flexibility, good track record, and profitable return potential. Commercial real estate, before the pandemic, had comparatively higher average rental as compared to the residential sector. It has been largely persistent against the overall economic slowdown in the recent past and has managed to attract investors due to its profitable return on investment. Tech Parks In Mumbai
- In 2019 commercial real estate accounted for maximum private equity investments in the real estate sector. This trend will soon be seen when office spaces reopen. Emphasis on social distancing has created greater demand for bigger and more open office spaces.
- Commercial transactions that were in advanced stages and were expected to be sealed towards the end of the financial year 2019 are all on hold due to the outbreak of COVID-19 and the lockdown.
- Investors are in a wait-and-watch mode as there is still not much clarity on the impact of COVID-19.
- Activity in commercial real estate is expected to be high during the festive season around the fourth quarter. Business Parks In India
- Current advisories restricting travel following concerns over the coronavirus pandemic have also led to delays in decisions on commercial real estate space take-up.
- Real estate experts believe that the number of deals is likely to reduce to half or around $2.5 billion as investors will not rush to invest immediately post lockdown.
- Real estate investment has drastically declined to $712 million in 2021 from $1704 million in the year 2019.
- In the next six months, if COVID-19 in India is not contained, business operations will suffer drastically, occupiers will be forced to initiate renegotiation of leases or ask for some relief from developers/landlords.
- Valuation of commercial assets will depend solely on demand and supply dynamics.
- We see COVID-19 induced economic slowdown in the USA and Europe over the medium term as a bigger risk to Indian office demand in CY21-22E.
- 2/3rd of commercial space in India is occupied by MNCs from UK and USA. The economic slowdown in these countries may impact medium-term demand for offices in India.
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