Sunday, July 14, 2024

2023 round-up – The real estate sector anticipates a promising year ahead

The Indian real estate sector has witnessed remarkable growth in 2023, driven by economic expansion, urbanization, increased business activity, and government policies. Despite challenges, global investments and consolidations marked 2023 as a favourable year for the evolution of India’s real estate sector and further exhibit promising opportunities in 2024. 

The residential market remains positive with robust demand. According to the JLL report, the market has seen growth with 1.96 lakh units sold in the first nine months of 2023, equivalent to 91% of total sales in 2022. New launches in this period reached a record of 2.23 lakh units, with an expected 2.8 lakh units by year-end. Besides, the luxury segment saw an 83% sales increase, from 8,013 units in 2022 to 14,627 in the same period of 2023, reflecting a trend toward larger homes. 

Pradeep Aggarwal, Founder & Chairman, of Signature Global (India) Ltd., said, “The year-end reflection unveils a YOY upswing, showcasing a strategic prowess in meeting the escalating demand for affordable yet quality residences. In areas like Dwarka Expressway, New Gurugram, and South of Gurugram (Sohna), SPR residential demand has seen a significant upswing, driven by keen interest from buyers towards mid-housing and massive infrastructure development in these locations. The spotlight on the mid-housing sector has been particularly noteworthy, reflecting the discerning preferences of homebuyers seeking the perfect blend of affordability and quality living.”

Going beyond metros, tier 2 cities emerged as new and thriving realty markets catching up with the interest of buyers and investors. Speaking on the tier 2 market prospects, Parvinder Singh, Chief Executive Officer, Trident Realty says, “The real estate sector in 2023 has seen a significant shift in investor and homebuyer sentiments, which has played a crucial role in shaping its growth trajectory. One of the noteworthy trends has been the increased demand for premium and luxury residential properties in tier 2 cities, reflecting the growing aspirational living in non-metros. Amongst tier 2 cities, Tri-city (Panchkula) is immensely promising in the forthcoming years due to its strategic location, connectivity, quality of life, and economic opportunities. The shift towards tier 2 cities is not only spurred by aspirational living but also infra upgradation, seamless connectivity, and supply of luxury projects catering to the demand of homebuyers. The ascent of tier 2 cities and luxury housing are not just trends but fundamental swings that will navigate the sector towards new horizons.”

The upswing in the economy and the returning workers to offices, has also led to a heightened demand for commercial real estate. The surge in demand is propelled by creative office space concepts, pro-business initiatives, and high-quality amenities offered to tenants. Besides, retail real estate has witnessed record-breaking leasing activity and brand expansions. 

On this, Abhishek Trehan, Executive Director, Trehan Iris says “The year 2023 has been a remarkable one for the real estate sector with a consistent rise in growth. Investors and buyers showed a lot of confidence, and this has resulted in a sustained growth momentum throughout the year. Industry reports indicate that the top six cities have recorded an all-time high office demand, with a total of 38 million square feet of office space absorbed in the first three quarters of 2023. In addition, the office space rental rate has grown by 17 percent annually in Q3 2023. The retail space segment has also witnessed significant growth in 2023, with a 46 percent increase in retail leasing across the top 8 cities compared to the previous year. This growth is attributed to the sector’s resilience, investors’ confidence, brand expansion, new brand entry, and increased appetite of shoppers. Retail space is expected to experience even more growth in the coming years, as developers are focusing on expanding their business portfolio due to strong demand. We expect the real estate sector to have an exceptional year ahead reaching newer heights.”

The retail sector in Delhi NCR is experiencing substantial growth, offering attractive prospects for both retailers and investors. A CBRE South Asia report states a remarkable 65% year-on-year surge in retail leasing across high-grade malls, high streets, and stand-alone developments in the first half of 2023.

Kaustubh Chandra, Manager, Brahma Group, says, “The real estate sector outperformed this year, witnessing robust growth across commercial, retail, and housing segments, fueled by positive market sentiments. According to Knight Frank’s report, India’s office rental space transacted a substantial 16.1 million square feet area in Q3 2023, indicating a robust 17% year-over-year growth in the industry. The evolving market trends, infrastructure development, technology, and business expansion are some of the key factors that propelled the growth. Additionally, Delhi-NCR being one of the most preferred locations, witnessed strong growth in the retail sector, witnessing a rise of 46% to 4.73 million sq ft in 8 cities in the same period showing a notable increase from the previous year. Looking ahead to 2024, the projections for the real estate industry seem optimistic and poised for sustained growth. Moreover, the industry is set to offer persuasive opportunities for investors, marked by innovation, resilience, and a progressive vision for the future.”

Anticipating a substantial surge in growth, projections suggest a commendable increase in demand in both residential and commercial sectors. This landscape of growth, resilience, and innovation raises an optimistic outlook for investors and stakeholders, shaping a promising outlook for the evolution of India’s real estate sector. 

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