At A New Paradigm in 2021
From the depths of despair during the pandemic-induced lockdowns, the New Year brings a scenario where the question shifts to 'why not India?' from 'why India?'
The potential for growth in investment by global players in India appears promising, to say the least - to give one example, Jio attracted global investments through 2020. This in turn, will positively impact commercial real estate as we move into 2021.
Overall, real estate as an industry is witnessing a growth in residential real estate over the past few months. As the new-age home buyers made moves, sales figures posted higher numbers over the past few months. Property registrations in states like Maharashtra reflected a y-o-y increase of 36 per cent between September and mid-November 2020, over the corresponding period in 2019. Not only are the numbers better than those of last year, each month is seeing better numbers over the previous month. Going into 2021, the momentum is expected to continue and residential real estate sales will continue to grow.
The 'new normal' in a world where humankind co-exists with challenges like corona comprises a different set of parameters, which effectively redefine the paradigm. Commercial real estate always mirrors the economic scenario. During the pandemic, economic growth was hit. Given that the vaccine appears to be just around the corner, a return to 'near normalcy' seems to be on the cards. This definitely creates a positive outlook as the New Year appears just over the horizon.
Through 2020 - a challenging year that saw the Covid-19 pandemic severely impact the economy and real estate - Indian commercial estate witnessed an unexpected scenario, one where the pandemic-induced lockdowns, while negatively impacting offtake across segments of real estate, reflect positive numbers in segments like data centres, wellness and healthcare spaces and logistics - not just through the series of lockdowns, but also beyond.
At the same time, office spaces faced a 'status quo' of sorts, as 'work from home' led to hardly any growth in demand through the first half of 2020. The 'new normal' also saw co-working spaces redefine parameters, and demand in this segment has shown slow growth amidst the trend of 'remote location working'. Business organisations, through 2020, adopted digital platforms for their workforce. As a result, the definition of 'workspace' and its relevance to location are undergoing major changes.
The pandemic has resulted in tectonic shifts in the way people live, work and play. Business organisations not just adopted digitisation for day-to-day operations, they also incorporated cloud technology and measures for cost optimisation.
The changed scenario has resulted in upskilling the workforce, which has to be nimble and be able to adapt to new trends so as to stay relevant to the workforce economy. Going into 2021, there will be demand for office space that meets the requirements of team collaborations, knowledge sharing, and networking culture which has become crucial for business continuity plans.
Segments such as retail, entertainment, hospitality and F&B will take longer to return to the pre-Covid-19 levels through 2021, although the vaccine will definitely make a huge positive difference.
To sum up, real estate has evolved through the challenges of 2020 to reach the new paradigm, and the 'new-age home buyer' will ensure off-take of residential real estate through 2021. Commercial real estate will also grow through 2021 - although some segments may take a tad longer - amidst resilience as the vaccine is deployed, which beckons the world back to 'near normalcy'.
