New Delhi, June 27, 2020: The outbreak of COVID-19 pandemic has put real estate deals on hold across the world but the sector is hopeful and poised for recovery as early as the fourth quarter of 2020. Real estate experts are anticipating that huge pent up demand created due to the ongoing lockdown will propel prices and push commercial real estate towards an upward trajectory.
As per the recent industry reports, the commercial real estate is said to be the pre-eminent sector and also the least impacted with 90% of rent collection during the lockdown period. It is believed that once the vaccine is invented in FY21, there could be the absorption of 25-28 msf (meter square feet), with steady demand for rentals.
“The post-COVID-19 scenario will emerge as a critical lifeline for India’s commercial real estate. Over the past few years, commercial realty has defied the trend of a slowdown and yielded a fair amount of returns on investment. We foresee the continuity in this trend being propelled by the growth of Business Process Outsourcing (BPO) and IT/ITes segments. The COVID-19 crisis has also reinforced the support of the local community. In the retail sector, this may reinvigorate the high-street retail concept and mixed-use realty. The high street retail has been able to adapt in response to changing consumer behaviour over the years. The focus on the omnichannel strategy and leveraging cutting-edge technology will further aid it in forging long-lasting engagement with consumers. The Indian government has announced a series of initiatives to keep the economy afloat amidst the lockdown. These measures coupled with the demand pickup will set the path to recovery for commercial realty.” said Mr. Ravish Kapoor, Managing Director, Elan Group.
The commercial real estate sector is expected to see an upside post-COVID-19 as only 10 percent of jobs are moving toward WFH resulting in the demand for more office space in the near future.
The sector may also continue to attract Private Equity investment. A recent report by Colliers had pointed out that commercial real estate will continue to attract PE investment and the Indian economy will witness robust growth as compared to other economies despite the COVID-19 pandemic. However, much will hinge on how the pandemic pans out in India and the ability of the real estate developers to adapt to the crisis.
Corporate Comm India(CCI Newswire)
