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In the first quarter of 2019, the growth in real estate service has been 7.3%, and much of it owes to the REIT effect. The government has come up with a policy that allows a seamless access to liquidity and implementation of the REIT (Real Estate Investment Trust). Eventually, this has led to an increment of real estate services in India by 7.3% during the quarter between January and March. The tech corporates have been acquiring office and commercial spaces in different cities in the country. The demand for commercial real estate in the key cities of India is high. Business firms are looking for quality office spaces in the cities, which is one of the reasons for the high sales of properties. Their share in leasing has increased to 33% in Q1 2019 from 22% in Q1 2018. For investors, this is a good time to acquire residential and commercial properties in India. With several factors favouring real estate business now, the growth is on cards.
The Managing Director of Advisory & Transaction Services, India, CBRE South Asia has spoken about the growth of real estate services during the first quarter of 2019. He stated that the industry has been bolstered by a number of policy initiatives, that the government has implemented over the last few years. As a result, the liquidity pressure has been eased out and construction activity in India has got a boost.Besides, the listing of the first REIT of India has also prompted buyers to acquire new properties. As a cumulative effect of all these factors, the real estate services along with professional and financial services has increased by 7.3%.
In the coming years, the focus will be on providing smarter space solutions. This can be done primarily by implementing better technology in various aspects of project development. A shift is also required from LEED certifications to delivery ofWELL Building StandardTM (WELL) certifications of WELL Building Institute. This can actually redefine the office space section.
Experts, on elaborating how the growth in real estate services took place, stated that various factors have contributed to this increment. The quarterly addition to the supplies has taken place in Bangalore, Delhi-NCR and Hyderabad by 80%. The rise in addition in the first quarter has been 23% and the growth looks impressive. Other cities that reported an increment in development completions, calculated on a quarterly basis include Chennai and Ahmedabad.
The experts have also revealed that the Special Economic Zones (SEZs) have contributed to one-third of the supply of the quarter. As compared to Q1 2018, the increment has been almost 40%. The entire SEZ supply in cities like Hyderabad, particularly, was committed earlier. The developers did not invest in speculative development in this particular area.
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