Indian real estate: an analysis of 2015, JLL report

Today, the world sees India as a land of opportunity for business and investment. As per government data, economic growth reached 7.4% in the second quarter of the current financial year, riding on a spike in manufacturing and a pickup in investment demand.

Commercial Real Estate

India’s office space absorption during 2015 stood at 35 million sq ft – the second-highest figure in the country’s history after 2011. Demand for office space in 2015 was the result of corporates implementing their growth plans.

Real Estate Capital Markets

2015 has been an interesting year for capital market activities. While the PE focus continued to remain high on residential and office projects, entity-level investments and platform-level deals also came into the limelight, indicating increase in investor confidence.

Residential Real Estate

2015 did not bring the hoped-for growth. However, the silver lining is that the bad days seem to have bottomed out; sales have picked up in Mumbai, Hyderabad and Bangalore. Launches have reduced in Mumbai, slightly lowering the inventory. Developers’ initiatives like offering attractive schemes and deal terms, coupled with lowering of interest rates by RBI, have activated fence-sitters.

Retail Real Estate

The two big trends observed were the consolidation of retail real estate by brands and retailers and the entry of institutional investors. Industrial & Warehousing 2015 saw the wheels in motion for the Industrial / Manufacturing sector to get seriously rolling in 2016. Under the ‘Make in India’ programme, states can come up with advanced policies, which will help them fuel their Industrial growth.

Hospitality

2015 alone saw nine hotel transactions (excluding partial equity stake buyouts or refinance) equal to the combined number seen in the last two years.