Residential, Office, Retail and Logistics Sectors
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.