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Upward momentum continues in realty sector
Realty sector sees poor resolution rate under IBC
Investments grew by 4% Y-o-Y in H1 2022 to $3.4 billion; to touch $6 billion by the end of 2022; metros continued to account for a bulk of investments: CBRE - CII Report
Hyderabad: Unprecedented sales and launch momentum has been witnessed in January-June (H1) 2022. Property prices have increased across most micro-markets and across segments due to record sales and developers' decision to pass on rising construction costs to buyer, says a report. However, monetary tightening by the RBI to tame inflation could raise financing costs.
Real estateconsulting firm CBRE South Asia Pvt Ltd has released "Indian Realty – Charting the growth roadmap for 2022" report at CII Realty 2022 - 18th Edition of Conference Real Estate. The CBRE-CII joint report highlights key trends and projections for the Indian Real Estate sector for 2022. According to it, investments in the real estate sector grew by 4 per cent Y-o-Y in H1 2022 to $3.4 billion.
The office sector dominated investment activity during the period with a share of 48 per cent; followed by development sites / land at 33 per cent. The investments in the retail sector accounted for 13 per cent of the total inflows in H1 2022 compared with 1 per cent in the entire 2021. Metros continued to account for a bulk of investments; office, retail and development sites remained investment drivers.
Anshuman Magazine, Chairman & CEO, India, South-East Asia, Middle East & Africa, CBRE, said: "The real estate sector performed well in H1 2022 amid the evolving market dynamics. As economic recovery continues to gain momentum, we expect a further boost to the leasing activity across the sectors. A robust policy and regulatory environment will encourage overall infrastructure growth in the long term." "We are currently witnessing a fall in unsold inventory levels across most top cities of India, except a select few locations. The fall is attributed to robust sales despite steady new launches. As a result, inventory overhang at a pan-India level is at a six-year low, with average quarters to sell for projects falling from over 15 in 2017 to sub-9 levels in H1 2022," he informed.
Real estate investment trusts (REITs) could emerge as a stronger investment medium owing to portfolio expansion and launch of new REITs across office, I&L and retail assets. Investment activity in land / development sites is expected to hold strong, with the residential sector accounting for a major portion of these capital inflows.
In H1 2022 alone, nearly 700 acres of land across various asset classes were acquired for over $1.1 billion.
