Mumbai, Maharashtra, India, January 9, 2024 – The global real estate market had been on sort of an uncertain trajectory after the coronavirus pandemic. Globally, investors were cautious, and the real estate market was as unpredictable as ever. The possibility of remote work turning into a corporate mainstay seemed like a horrifying curse on office spaces and commercial real estate in the global realty industry.
Well, the pandemic died down, and the world woke up from a year long hangover; after which there was a growing appreciation for the need for physical workplaces and shared commercial property.
While the Indian real estate market has been ahead of the international curve in the last couple of years, global real estate trends picking up has given an even bigger boost to the luxury residential and commercial real estate Investment
In fact, as per a JLL India Analysis, office space absorption in 2023 is expected to exceed the 2017-19 average, acting as a testament to office space demand in the country.
The birth of the hybrid work model, the need for a collaborative company culture, and shared physical spaces for creation and innovation has led to an increased demand for commercial real estate as well as trophy residential properties.
Understanding the Indian Real Estate Market
Residential Sector
The residential sector is a huge part of the Indian real estate market. Affordable housing is, and will remain a key priority for both the government and homebuyers in India. Many bigwig developers are focused on projects aimed towards the middle income classes.
According to the Knight Frank New Horizon Outlook 2024, more than 50% of the population in the Asia Pacific region will be middle class by 2024. This is a historic feat in and of itself, and it also means that the number of people below the poverty line will fall below 50%.
In fact, as per CBRE’s India Market Monitor 2023, the luxury residential market saw a mouthwatering 151% Year on Year (YoY) sales increase during the first quarter of 2023.
High value properties in Delhi NCR saw an increase of 216%, with Hyderabad first in the class with an unbelievable 800% sales increase.
How Commercial Real Estate is Taking Over
While the residential sector provides stable returns, the commercial real estate sector offers some very attractive advantages: Commercial properties such as office buildings, retail spaces, shopping complexes, offer significantly higher returns, and potentially higher rental yields. As per our data, alternative investments in commercial properties offer up to 4 times as much returns as residential properties.
This makes the commercial realty space one to keep an eye on if you’re looking for higher returns, flexible liquidity options, and portfolio diversification.
Commercial Real Estate: Key Statistics
According to CBRE, the country’s commercial real estate project count is expected to rise from 37% in 2022-23 to more than 40% in 2023-24.
India’s commercial real estate market is thriving, particularly in major cities such as Mumbai, Delhi, and Bengaluru. The expanding industries of IT, e-commerce, and startups are driving up demand for office spaces, retail establishments, and shared workspaces.
Key Points
- With the advent of the sharing economy, the real estate game is undergoing a revolutionary transformation, presenting a compelling opportunity for investors.
- Co-living and co-working spaces are becoming increasingly popular among millennials and professionals, opening up a lucrative market.
- According to Mordor Intelligence, the India Co-working Office Spaces market has already reached an impressive USD 1.78 billion this year, with a projected growth rate of more than 7% in the coming years.
Indian Real Estate in 2024: What to Expect?
India is currently one of the fastest growing economies in the world, with the Reserve Bank of India forecasting 6.5% growth for fiscal year 2024.
As per a report by Colliers, the Asia Pacific sector is expected to see a major spike in investment activity in the real estate market, with India all set to be one of the bigger regions for inflow of investment.
And the trend is not surprising. 2024 Real estate trends in India indicate that investor confidence is being restored, owing to factors such as government reforms, improved transparency, and the positive impact of economic policies.
Real Estate Growth in Tier-2 and Tier-3 Cities
With real estate investment in metro cities rising rapidly, the searchlight for hidden potential has landed upon tier-2 and tier-3 cities in India. These cities, such as Pune, Hyderabad, Kochi and Chandigarh, offer a scintillating blend of affordability and potential for growth.
Some of the factors for the growth of these cities include: The smart cities program launched by the Indian government, and new developmental and infrastructural projects, which are a result of heightened demand.
Alternative Investment in Real Estate: 2024 and Beyond
Alternative investment in real estate, such as through REITs, fractional or joint ownership of commercial property, and commercial leasing have become hugely popular in a short span of time.
How the Fractional Ownership Realty Market Has Gained Ground
A recent report by Knight Frank reveals: in 2020, the Indian market for fractional ownership boasted a value of USD 5.4 billion; this figure is projected to surge–at an anticipated Compound Annual Growth Rate of 10.5%–reaching USD 8.9 billion by the year 2025.
Fractional ownership of commercial real estate, among other models, offers a level of investment convenience uncommon in the real estate sector. Increased flexibility, decreased entry barriers relative to full property ownership and mitigated risks through joint co-ownership where investors share costs and profits are key factors driving successful adoption of this approach in India.
Assetmonk: Secured Alternative Investment in Commercial Real Estate
Assetmonk is not just an investment platform: it provides a new pathway to alternative investments in commercial real estate. Using technology, proper scouting of high end commercial locations, and market expertise, Assetmonk offers its investors the opportunity to diversify their portfolios with high potential real estate projects.
Based on the emerging real estate trends and favourable market conditions, 2024 is as promising as ever a time to consider investing in real estate in India. With the right knowledge and experience, investors can navigate the industry, and have full confidence and take part in this thriving sector.
Media Info:
Name: Ravichandra Sathari
Organization: AssetMonk
Website: https://assetmonk.com/
Email: invest@assetmonk.com
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