Real estate outlook positive for 2017 on back of strong reforms, says CBRE
CBRE South Asia Pvt. Ltd., India’s leading real estate consulting firm, today announced the findings of its Asia Pacific Real Estate Market Outlook 2017 India. As per the report, India continues to hold its position as the world’s fastest growing G-20 economy, on the back of improved investor confidence and better policy reforms. The report is part of a global research series released by CBRE every year, highlighting trends and dynamics across various segments in the real estate sector for the year ahead.
Commenting on the buoyancy of the sector, Anshuman Magazine, Chairman, India and South East Asia, CBRE said: “With 2016 being the year of landmark decisions for the Indian real estate industry, the sector saw concerted efforts by the Government to bring in transparency as well as boost consumer sentiment in the sector, especially in the residential market. The outlook for the year 2017 is positive with an expectancy of steady growth, stability and revival in the market.”
High absorption levels and global investor interest will continue to bring life into India’s office sector. In 2017, the office sector is likely to maintain its momentum with an anticipated absorption of 40 million sq. ft. A strong trend of ‘pre-commitment’ in under constructed buildings while IT/ ITES to continue to be the key demand driver for space across the coun- try. CBRE says that technology to play a key role, even as the occupiers are expected to keep a strong check on space utilization ratios and innovations in workplace strategies, while implementing their expansion plans
Global occupiers to continue to account for sizable share of leasing activity, however we see a rise in activity from domestic corporates.
India residential supply has jumped up by 70% q-o-q in Q1 2017. Compared to only 18,000 units launched in Q4 2016, we have seen more than 30,000 units launched in Q1 17. The biggest jump was in Chennai, Hyderabad, Kolkata and Bangalore.India housing sales have also jumped up by 70% q-o-q in Q1 2017. Compared to only 14,000 units sold in Q4 2016, we have seen more than 23,000 units sold in Q1 17. Housing sales are expected to revive in 2017 both in primary and secondary market and affordable housing, which is witnessing increased interest from private developers, will emerge as a key driver of housing sales.
The year 2017 is likely to be positive for the retail sector which is likely to witness an increased quality supply. Demand for organized retail space will continue to exceed the supply. Consumption patterns are likely to mature due to increasing urbanization with upcoming retail developments to allow entry points for global retailers beyond the traditional epicenters of Delhi NCR and Mumbai. REITs will enable development of better quality malls and discourage strata-sale of properties. Implementation of GST would lead to rationalization of tax at different levels with expected improvement in ease of doing business and movement of retail goods.
2017 WILL BE POSITIVE FOR THE RETAIL SECTOR WHICH IS LIKELY TO WITNESS AN INCREASED QUALITY SUPPLY