Demand for commercial real estate expected to rise

The demand for commercial real estate in India has been increasing consistently over the last few years. Even though the real estate industry had struggled in recent years, following the reforms introduced by the government, commercial real estate has continued to attract the buyers. Experts reveal that this trend is likely to continue in the coming years as well. NRIs, too have been investing in the real estate market in India over the last few years. Particularly, they are interested in the commercial real estate segment.

For Canada based investment firms, India is one of the most important real estate markets. The Indian government has taken effective measures to draw investors. With the advent of long-term investors in the commercial real estate sector, the market conditions have improved significantly in the last few decades. The commercial real estate sector looks relatively more attractive, as compared to other segments in the industry. Investors look at commercial real estate in a different way, as they perceive residential properties in India. Evidently, the flow of capital has been far easier in the commercial real estate sector, and a select set of investors has been focusing on this segment over the last few years.

An expert says that it might take another 12-15 months for the residential real estate sector to completely recover and pick up pace. He further stated that the residential real estate market had primarily slowed down as capital investments have not been prudent enough. The developers did not care much about the needs of customers and they signed the MoU one after another. However, the situation is likely to improve in the years to come.

In 2018, the sales of residential property have shown a steady rise. The sentiments of both the developers and homebuyers have been hit by the liquidity crisis, that took place during the end of 2018. However, the commercial real estate segment has not been much affected due to this situation. The demand for commercial real estate has continued to rise, and in the leading cities, a large number of commercial projects have been launched in the last few years. This has been possible primarily due to the reforms of the government, including the IBC (Insolvency and Bankruptcy Code) and GST. The financial discipline has been instrumental in bringing about consolidation in the real estate sector.

Presently, commercial real estate investors from various parts of the country are looking for quality spaces in the key cities. NRIs, too, have been interested in buying these properties. Commercial real estate has performed consistently well, and better than residential real estate during the last couple of years. If this trend continues, the real estate sector is likely to get back to its normal health in the next few years.