India’s real estate sector seen through the COVID-19 lens

India’s office markets were coming off a record year of leasing activity and new supply additions in 2019 (69.2 msf of gross leasing, 45 msf of net absorption and 51 msf of new supply), and the first two months looked like an extension of the same momentum.

COVID-19 has dominated our lives and the headlines in recent times with statistics on active cases and mortality rates. With the year zooming by in a blur of terms like transmission, detection, isolation, social distancing and hand sanitisers, the economic, business and personal ramifications have been countless.

As a researcher, one looks to bring all commentary across myriad fields to assess the impact on the real estate sector in particular. However, these are such interesting yet uncertain times, that hazarding an on the point forecast becomes difficult, given the current VUCA times.

One may, however, look at emerging trends, glean from conversations among the corporates, those wearing future hats and then marry that with on-ground market assessment, experience of previous slowdowns (albeit not health related but nonetheless impacting economic activity) and subsequently wear a forecasting hat himself. It makes for interesting results. I will focus on the real estate side of things.

India’s office markets were coming off a record year of leasing activity and new supply additions in 2019 (69.2 msf of gross leasing, 45 msf of net absorption and 51 msf of new supply), and the first two months looked like an extension of the same momentum.

However, one knew from the outset that 2020 would not hold itself to the gold standard that was 2019. Demand for offices was expected to remain strong, nevertheless. The commercial office market was really firing among the conventional asset classes even as retail was largely stable with an upward bias.

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