While the pandemic has thrown some unprecedented challenges for the sector throughout this year, it has been able to create certain unique opportunities for the sector which are likely to usher in a new era of innovation going forward.

By Kausar Firdausi

The pandemic has thrown some unprecedented challenges for the sector throughout this year. It also saw the slow construction activity and change consumer demand over the space of a few months – with more looking to move into the less densely populated suburbs as working from home became the new reality. However, recently there has been a good spike in the recovery of the sector.

Below is a lowdown of how the realty story across various segments unfolded in 2020:

 

Residential
With the covid induced lockdown, people realised the importance of owning a home. According to Prashant Bindal, chief sales officer, Lodha Group, subsequent to emerging as the epicentre of all activities, larger homes having green, open spaces with decks and gardens have witnessed an upsurge. Aspirant homebuyers are willing to spend on that extra space and graduate towards buying bigger apartments with availability of a recreational area. “Since this festive season, we have already observed a spike in consumer interest for luxury and premium units,” says Bindal.

At the industry level, Anarock data reveals that the top seven cities altogether saw housing sales of nearly 87,500 units in the first three quarters (Jan.-Sept. period) of CY2020. Further, despite the unusual pressures on the housing market, residential real estate has been on a high this festive season (Oct.-Dec. period) due to multiple offers and discounts doled out by developers, all-time low interest rates and limited-period stamp duty cuts in states such as Maharashtra.

Despite the pandemic, also M3M has successfully sustained the momentum of operations. “We have been the only developer to deliver eight projects in three months (July-Sep). Through our Unlock Gurugram campaign in July-Aug, we not only clocked buoyant sales but also boosted consumer confidence. Overall we recorded sales worth Rs 2500 crore from Apr-Nov,” proclaims Pankaj Bansal, director, M3M Group.

“We have been the only developer to deliver eight projects in three months (July-Sep). Through our Unlock Gurugram campaign in July-Aug, we not only clocked buoyant sales but also boosted consumer confidence. Overall we recorded sales worth Rs 2500 crore from Apr-Nov.” — Pankaj Bansal, Director, M3M Group.

 

India Sotheby’s International Realty expects a 40 per cent surge in our revenues this fiscal, driven by the overall buoyancy returning to the luxury segment of the market. “We have been successful in closing high-value transactions with deal sizes ranging between Rs 65 crore and Rs 100 crore+ during the last three to four months,” avers Ashwin Chadha, president, India Sotheby’s International Realty.

Commercial

Interestingly, commercial segment which saw significant momentum y-o-y over the last two to three years, took a pause in 2020 due to covid. “The main efforts of developers this year have been to retain their old tenants rather than getting new ones. Rentals in office space in 2020 are more or less stable because developers wouldn’t want the market benchmark to change,” states Anuj Puri, chairman, Anarock Property Consultants. As per CBRE, the post-covid new normal has been characterised by the evolution of work patterns, which has altered the way both occupiers and developers have operated so far.

“The main efforts of developers this year have been to retain their old tenants rather than getting new ones. Rentals in office space in 2020 are more or less stable because developers wouldn’t want the market benchmark to change.” — Anuj Puri, Chairman, Anarock Property Consultants.

Retail
The segment was severely hit due to the pandemic with several malls’ completion being pushed to 2021 or later. Before covid-infused lockdown in March, Anarock research indicated that Indian cities were to see new supply of approx. 54 new malls in 2020 spread over nearly 22.2 mn. sq.ft. area. The ongoing festive season is definitely seeing increased footfalls in malls month-on-month. While the footfalls are yet to reach the pre-covid levels, sales have definitely resumed, resulting in high conversion ratio. All customers walking in are mostly serious buyers who have come with the purpose of purchase.

“The quarterly growth in warehousing space take was up by 105% from Q2 2020 – Q3 2020, with increase in absorption of space from 2.2 million sq. ft in Q2 2020 to 4.5 million sq. ft in Q3 2020.” — Anshuman Magazine, chairman & CEO, India, South East Asia, Middle East & Africa, CBRE.

Logistics
India’s logistics sector has witnessed a transformation after 2017 in terms of the quality of assets, mode of operations and type of investments. Despite the covid pandemic affecting leasing activity, it has shown remarkable resilience during the pandemic. In 9M 2020, 3PL firms and e-commerce operators accounted for more than half of the leasing activity, followed by engineering & manufacturing firms. Hyperlocal delivery gained steam during the pandemic as e-commerce players began sourcing their deliveries from neighborhood stores to meet customer demand. “The quarterly growth in warehousing space take was up by 105% from Q2 2020 – Q3 2020, with increase in absorption of space from 2.2 million sq. ft in Q2 2020 to 4.5 million sq. ft in Q3 2020,” informs Anshuman Magazine, chairman & CEO, India, South East Asia, Middle East & Africa, CBRE.