Broader recovery expected in 2021: JLL
Real estate businesses need to reimagine,
adapt to survive in the next normal
JLL, the country’s leading real estate consultancy firm, in partnership with The Confederation of Indian Industry (CII) today held the 12th Edition of CII Realty & Infrastructure Conclave 2020. A virtual thought leadership forum attended by the country’s top real estate professionals this conclave has been one of India’s leading platforms for experts to discuss opportunities, share insights and predict the course for the industry for over a decade.
The two-day event scheduled on 10th and 11th September 2020, will throw light on the reimagined chapter of growth in Indian real estate, fueled
by renewed demand and fresh perspectives.
Delivering the welcome speech for the conclave,
Ramesh Nair, Chairman, CII Realty & Infrastructure Conclave and CEO & Country Head, India, JLL,
said, “These are dynamic times. We all agree that no sector has escaped
the slowdown caused by the pandemic. The stakeholders of the real
estate need to prepare
for long-term impacts of the pandemic. But this is also a time to
innovate and reimagine. Ongoing changes will only accelerate the pace of
transformation that would have taken many years otherwise. It is time
to reinvent spaces, rethink strategies, bring collaboration
into workplaces and make them more human. The office is here to stay,
but its format and functions may change significantly. With significant
levels of capital available, investors continue to see real estate as a
valuable asset class. This has brought many
investors who took a ‘wait and see’ approach at the onset of the
pandemic back into the market. While office will lead the recovery, the
worst is behind the residential sector. Home loans rates are at its
lowest in 15 years and developers are offering attractive
discounts, payment plans and schemes. Ramesh further added,
“Since May, each month has been better than the previous month for our
industry. Growth prospects look brighter for the remaining months of
2020 and 2021.
Speaking at the keynote address Christian Ulbrich, Global CEO & President, JLL said, “Offices
of the future
will be less about densely packed floors, and more about providing
flexible creative hubs for people to interact, socialise, innovate and
learn – the things people have missed most during lockdown,”
Christian further added, “Post pandemic, as many businesses embed a blend of home and office working, central
business districts will revive to again become the beating hearts of major cities across the globe.”
“The
retail, hospitality, and commercial segments within the real estate
sector were growing significantly, thus providing the much-needed
infrastructure boost for
India's growing needs. Due to the pandemic, the worst impacted
sub-segment of the real estate sector are the retail and hospitality
sectors,”
said B Thiagarajan, Deputy Chairman, CII Western Region MD, Blue Star Ltd.
“Demand for warehousing is now increasing due to an increase in
E-commerce activities. The non-resident Indian (NRI) investment in the
sector is very prominent. We have seen a
hike in the numbers of enquiries from the NRI community,” he added
As
businesses open in a staggered manner, companies need to be prepared to
face the short-term jolts and be ready to embrace the impending
prospects of growth in the
medium to long term. While globally, all stakeholders in the real
estate industry are preparing themselves for long-term impacts of the
pandemic, this is also an opportunity to reinvent. Real estate
businesses will have to understand, comprehend, plan and
implement innovative ways to stay ahead of the curve. Real estate as an
asset class is here to stay, however adaption is important to survive.
Adoption
of technology will be the key going ahead. Corporates globally are
revaluating real estate strategy to make it more resilient to shocks.
De-densification,
splitting up of offices will gain momentum as more focus will be on
collaborative technology. More corporates will adopt flexible working
practices. The phenomenon of Work from Home (WFH), at best, a supplement
to the traditional way of working from office.
There will be an increased focus on health, safety and wellness
features and the importance of property management to expected to grow.
Workplaces
will undergo massive design modifications. There will be a combination
of core and flex, long term and short term and urban and suburban. One
thing is for
sure, the future will be hybrid. Apart from creating a human
experience, landlords and corporates will have to provide a sense of
safety and security. There will be a greater demand for better quality
office buildings which have the best technology systems
and sustainability features. Office is here to stay but the format will
change.
The residential story
While
there are certain uncertainties, the worst is behind for the
residential sector. With interest rates at their lowest levels in 15
years and developers offering
more flexible to accommodate buyers’ concern, this could be the best
time to buy a property. There is also renewed interest from NRIs and
joint families. Residential sales in the affordable and mid segments is
expected to show the fastest turn around. Consolidation
in the market is likely to further speed up.
The current
situation has given developers an opportunity to innovate, reinvent and
revisit their strategies on maintaining business continuity to navigate
through this pandemic. While the primary focus is shifting
to overall well-being, the focus on health, sustainability and wellness
is renewed vigor and is gaining prominence across asset classes. But a
broader recovery is expected in 2021.
Warehousing
is one of emerged as the preferred investment class with USD 6.4 bn
commitment announced/ invested by institutional investor during
2017-2020. Further,
data localization laws shift from captive to colocation data centre and
emerging trends like 5G, edge computing, and the internet of things
(IoT) will drive demand for data centers.
Silver lining
There
are positive signs aplenty. With the economy opening gradually, retail
footfalls have started picking up, office absorption levels improving
and industrial production
accelerating. Hotels have been allowed to re-open and many companies
are planning a reentry into their offices. Over the next couple of
quarters, all eyes will be on the ability of India to survive or contain
the pandemic.
As
the country’s most anticipated annual real estate event, CII’s annual
Realty & Infrastructure Conclave provides a fitting platform to the
foremost stakeholders of
the Indian real estate industry to discuss, debate and share their
vision for the sector’s collective and progressive growth.
--ENDS--
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