Office and residential buildings are seen in Mumbai, India. Reuters
During 2022, despite the ongoing economic concerns, the Indian real estate sector performed well and witnessed higher traction. In the current year, while some sectors such as office are seeing slowing demand, there are ample opportunities in sectors such as industrial, alternate assets, etc. that are likely to grab stakeholders’ interest.
On the office front, the year 2022 saw record office leasing as the total leasing crossed 50 million sq ft. However, the leasing was largely due to pent-up demand from the last two years and a recovery in demand.
With rapidly changing expectations of occupiers and rising focus on Environment and Social (E&S) compliance, there is massive opportunity for landlords and developers to upgrade outdated office assets.
The top six cities have Grade A office buildings of about 120 million sq ft that can be refurbished. According to Colliers, the stock of green certified buildings has witnessed a 5-fold increase in 2022 compared to 2010.
As a part of their short-term goals on ESG, listed developers target to increase their green portfolio by about 25 per cent by 2025-2030 and increase the use of renewable sources of energy. About 58 million sq ft of additional green grade A stock has received pre-certifications or are under discussion for green certification which is likely to come in the office markets of Hyderabad, Pune and Delhi NCR.
Upcoming government policies like National Logistics Policy, DESH Bill to provide an impetus to the sector.
Led by the supply chain disruptions during 2022, the government regulations and policies target to build a seamless logistics network across the country.
The National Logistics Policy (NLP) 2022 aims at bringing digital transformation in the logistics sector through an integrated digital logistics system that will connect businesses and resolve supply-chain constraints.
During this year, while demand from 3PL companies is expected to remain intact, the demand from engineering and electronics companies is likely to further accelerate, as consumption levels are rising and supply chain bottlenecks have now relatively eased out.
Over the last few years, the industrial sector has seen significant investment platforms where global investors are partnering with Indian developers.
The newer developments are expected to be best in class warehousing structures with AI and IoT enabled warehouse monitoring and management systems to seamlessly dispatch orders, track them and evolve them into on-demand warehousing centres.
According to Colliers, platform deals of about $2 billion have already been announced last year for the industrial sector.
Platforms will deploy these funds to develop Greenfield assets or Brownfield projects in the industrial sector over the next few years.
REITs have ensured stable returns to unit holders, with yields in the range of 6-7 per cent.
Consistent returns and success of REITs for office market assets has laid a strong foundation for other asset classes as well.
India’s first public issue of retail REIT is likely to hit the markets in the first half of this year.
Players in the industrial sector have also started amalgamating their portfolios as they have started eyeing Industrial REITs, buoyed by expansionary activity in this space.
My father inherited through gift deed ancestral property and he died recently. My siblings are not keen to share the property. Can I stake claim in the property? Please advice. Parvish Bhora, Sharjah.
In the event of transfer of property by gift deed and duly registered, it becomes the absolute property of the person inherited. However, if it is intestate, then it is distributed equally among the class I legal heirs. In your case, it depends on the will. If your father died intestate, then you will get an equal share in the property, along with your siblings and mother.
I intend selling the office space gifted to me by my family in Pune. Can I repatriate the sale proceeds? Nowshir Engineer, Abu Dhabi.
Yes. The sale proceeds of office space acquired by way of gift should be credited to NRO account only. From the balance in the NRO account, you can remit upto USD one million, per financial year, subject to the satisfaction of authorised dealer and payment of applicable taxes.