As per the Colliers India report, office sector led on the investment inflows front on the back of large technology companies continuing to lap up office spaces. Moreover, as per the report, investors too are taking a long view of the sector.

Institutional investments in the real estate market went up to $2.6 billion during January-June 2022, an on-year rise of 14 per cent from H1 2021. Investment inflows were led by office sector which accounted for a whopping 48 per cent, according to a recent report by the professional services and investment management company Colliers India.

Office sector led on the investment inflows front on the back of large technology companies continuing to lap up office spaces. Moreover, as per the report, investors too are taking a long view of the sector and binding assets into REITs.

For H1 2022, the retail sector followed up with a 19 per cent share of investment inflows on account of expansion of fashion and F&B brands, completed malls becoming investment avenues, and pickup in footfalls in malls. Investments into the alternate assets went up 53 per cent on-year to $370 million in the same period as investors looked to diversify their portfolios as deals during the period included data centers, holiday homes and life sciences.

“Moreover, there is untapped potential in India’s alternate assets which investors are looking for from a diversification perspective. During H1 2022, inflows in alternate assets accounted for 14 per cent of total investments. The next few quarters will see some greenfield investments, especially in the office and industrial & logistics sector,” said Vimal Nadar, Senior Director and Head of Research, Colliers India.

Industrial and logistics sector and residential sector, on the other hand, saw subdued inflows during the first half of 2022. Talking of on-year change in investment growth, the report further stated that investments in the office sector went up by 20 per cent while retail sector saw a whopping 537 per cent rise in investments year-on-year, the study pointed out.

“The first half of 2022 has witnessed euphoria of businesses bouncing back with increased office and industrial leasing, retail and travel spend, and continued buoyancy in the residential sector. However, the market is seeing some caution on account of geopolitical tensions and increased expected risk-adjusted returns,” said Piyush Gupta, Managing Director, Capital Markets & Investment Services, Colliers India.

Talking of investment hubs, Delhi-NCR continues to lead the pack with highest inflows of 35 per cent, followed by Mumbai with 11 per cent share and Chennai with 10 per cent share. Multi-city deals continue to remain highly preferred among investors with 43 per cent investments during the first half of 2022.

Domestic players are also back with a bang as domestic investments into the real estate market comprise 38 per cent market share in H1 2022, a jump from 13 per cent in the same period last year. Domestic investors inclined towards mixed-use assets and retail sector, the Colliers India report noted.

Stamp duty is a major source of revenue for the state government. On average in this financial year, the state government’s treasury, received Rs 2,500 crore through registration of properties and other documents with the Department of Registration and Stamps.

In October the figures had crossed Rs 3,200 crore mark and hence, when in November the figure came down to Rs 2,700 crore there was a hullabaloo that the real estate market was negatively impacted.

He said November had almost 10 holidays, including Diwali. Hence during the 20 working days, the collection of Rs 2,700 crore is a huge revenue. Last year, November had witnessed a substantial rise in registration as the state government had offered a discount on stamp duty from September 2020 to March 2021.

This prompted the developers to pass on the benefit to the home buyers, who too, rushed to buy homes. However, this year there was no such offer, yet the registration figures have surpassed the pre-pandemic days on many occasions.

When asked about the dip in registration figures in November compared to October, former president of CREDAI-MCHI, Nayan Shah said, “It’s natural, it has to happen, things peak then there is a valley.” The sales were less in November compared to October, and experts believe, availability of limited ready housing units and under construction not getting much traction could be a reason behind the dip. Pankaj Kapoor, MD, Liases Foras, a real estate research firm said, “I think there was a dip in sales post Diwali.

Mainly the pent up demand mostly got consumed. Besides, now there is limited ready stock available in primary as well as in the secondary market. Under construction units are still not gathering traction.”

Hardikar claimed the registration figures aren’t going down and predicted that in December too, the state may get revenue up to Rs 3,000 crore from registration. “Till the evening of December 16, the revenue generated was Rs 1,700 crore, by the end of this month the figure can touch up to Rs 3,000 crore,” he said. While the government is hopeful that the revenue shall keep coming in, experts and developers have a different opinions.

New Delhi [India], December 9 (ANI): The real estate industry welcomed the Reserve Bank of India’s (RBI) decision to keep the interest rates unchanged for the ninth consecutive time.

The RBI’s six-member monetary policy committee (MPC), headed by Governor Shaktikanta Das, on Wednesday announced its decision of maintaining the status quo on key rates in its bi-monthly policy statement for the ninth consecutive time.

The repo rate has remained the same at 4 per cent whereas the reverse repo rate has been kept unchanged at 3.35 per cent.

The repo rates were slashed by RBI in March 2020 to soften the blow from the coronavirus pandemic and to give an impetus to the economy.

Commenting on this move, Aditya Kushawaha, CEO and Director Axis Ecorp said, “We welcome RBI’s decision to keep the repo rate unchanged at 4 per cent and continue its accommodative stance. It seems to be a well-thought move, given the uncertainty emerging from the new COVID-19 variant. The Indian economy grew better than expected and posted 8.4 per cent growth during Q2 FY22 and we believe that today’s decision will support further growth through increased consumption and spending. We are also keeping a close eye on the raw materials as they can cause the rates to go up in the near future and disrupt the current growth graph.”

DIGITAL RENOVATION AND REAL ESTATE

Vinit Dungarwal, Director, AMs Project Consultants Pvt. Ltd. said, “The holding of rates by the MPC is on the expected lines. The continued intervention by RBI and holding on to the rates has helped in demand generation in the real estate sector. Through these sustained efforts, most high-frequency indicators have bounced back to pre-COVID levels. RBI has also projected the CPI inflation for Q3 and Q4 of FY22 at 5.1 per cent and 5.7 per cent respectively. This is indicative of RBI’s belief that the current inflation levels are temporary in nature”.

Dr Samantak Das, Chief Economist and Head of Research & REIS (India), JLL said, “The unexpected global headwinds propelled by the new Covid-19 variant to the economic recovery prompted Reserve Bank of India to maintain the policy rates. RBI has kept the policy rate unchanged for the ninth time as it has been trying to support growth and rein inflation. Indian economy grew better than expected by posting 8.4 per cent growth during Q2 FY22 indicating the strength of the economy. The accommodative stance and gradual normalisation measures also signal that economy is on the firm path of growth. The Indian economy has demonstrated its resilience to uncertainty in the past and it is expected to deal with it more prudently in future.”

The growth registered by the real estate sector in Q3 2021 is likely to continue and to end this year on a positive note. In Q3 2021, residential sales witnessed an upward trajectory, increasing by 65 per cent on a sequential basis.

This sector is expected to benefit from a regime of low mortgage rate, coupled with duty waivers, realistic property pricing and attractive offers leading to affordable synergy. (ANI)