Res­i­den­tial, Of­fice, Re­tail and Lo­gis­tics Sec­tors

NBM&CW - - OVERVIEW – REAL ESTATE - CBRE 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, In­dia’s eco­nomic growth stood at 7.6% in the year end­ing March 2016, an uptick from the pre­vi­ous year (7.1%). How­ever, after the de­mon­e­ti­za­tion drive un­der­taken by the In­dian Gov­ern­ment in Novem­ber 2016, growth pro­jec­tions were low­ered. The im­pact of de­mon­e­ti­za­tion was ex­pected to be cat­a­strophic for the econ­omy, how­ever, ac­tual fig­ures re­leased for the ini­tial months of 2017 have been en­cour­ag­ing; in­dica­tive that the econ­omy is al­ready on its way to fully ab­sorb the im­pact of the pol­icy.

The year 2017 is ex­pected to be a year of fruc­ti­fi­ca­tion – with the results of all pol­icy ini­tia­tives taken in 2016 be­gin­ning to take shape. Most of the steps, in­clud­ing Real Es­tate Reg­u­la­tory Act (RERA), Goods and Ser­vices Tax (GST) and Real Es­tate In­vest­ment Trusts (REITs), are aimed at im­prov­ing trans­parency and en­hanc­ing the over­all in­vestor sen­ti­ment.

The year 2016 wit­nessed a ma­jor­ity of real es­tate in­vest­ment con­cen­trated to­wards well leased/well or­ga­nized of­fice de­vel­op­ments, fol­lowed by res­i­den­tial and al­ter­nate sec­tors such as re­tail, lo­gis­tics and hos­pi­tal­ity. Re­tail as­sets wit­nessed a par­tic­u­lar in­ter­est in the past year with play­ers such as Black­stone, GIC etc. ac­quir­ing as­sets in Mum­bai, Pune and Chen­nai. In 2017, proac­tive gov­ern­ment poli­cies are likely to pro­vide a more se­cure en­vi­ron­ment for in­vestors. While of­fice and res­i­den­tial are ex­pected to re­main tra­di­tional driv­ers; how­ever, al­ter­nate sec­tors such as re­tail and ware­hous­ing will also come to the fore­front.

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