Indian economy has shown great resilience

Indian economy has shown great resilience, from the depths of despair during the pandemic to a scenario where the new year 2021 brings a paradigm shift – from the question, ‘why India’ to ‘why not India? As India Inc attracted global investments through 2020, the potential for growth in investment by global players in India appears promising, to say the least. This in turn, will positively impact commercial real estate as we move into 2021.

Overall, real estate as an industry is witnessing a growth in residential real estate over the past few months. As the new age home buyer makes a move and figures of sales post higher numbers over the past few months, property registrations in states like Maharashtra reflect a YoY increase of 54% per cent in the period September – December  2020, as compared to the corresponding period in 2019. Not just that the numbers are better than last year, each month is seeing better numbers as compared to the previous month. Going into 2021, the momentum is expected to continue; and sales of residential real estate will continue to grow.

The ‘new normal’ in a world where humankind co-exists with challenges like Corona comprises a different set of parameters, which effectively redefine the paradigm. Commercial real estate always mirrors the economic scenario; during the pandemic economic growth was hit. Given that the vaccine appears to be just around the corner, a return to ‘near normalcy’ seems to be on the cards. This definitely creates a positive outlook on the onset of the New Year 2021

Through 2020, a challenging year that saw the COVID-19 pandemic severely impact the economy and real estate; Indian commercial estate also witnessed an unexpected scenario: one where the pandemic-induced lockdowns, while negatively impacting off-take across segments of real estate, reflect positive numbers in segments like data centers, wellness and healthcare spaces and logistics – not just through the series of lockdowns, but also beyond.

At the same time, office spaces faced a ‘status quo’ of sorts, as ‘work from home’ lead to hardly any growth in demand through the first half of 2020. The ‘new normal’ also saw co-working spaces redefine parameters, and demand in this segment has shown slow growth amidst the trend of ‘remote location working’.

Business organizations, through 2020, adopted digital platforms for their workforce. As a result, the definition of ‘workspace’ and its relevance to the location is undergoing major changes. The pandemic has resulted in tectonic shifts in the way people live, work, and play. Business organizations not just adopted digitization for day to day operations, they also incorporated cloud technology and such measures for cost optimization.

The changed scenario has resulted in up-skilling the workforce, which has to be nimble and able to adapt new trends so as to stay relevant to the workforce economy. Going into 2021, there will be demand for office space that meets the requirements of team collaborations, knowledge sharing, and networking culture which has become crucial for business continuity plans.

Segments such as retail, entertainment, hospitality and F&B will take longer to return to pre-COVID19 pandemic levels through 2021, although the vaccine will definitely make a huge positive difference.

To sum up, real estate has evolved through the challenges of 2020 to reach the new paradigm and the ‘new age home buyer’ will ensure off-take of residential real estate through 2021. Commercial real estate will also grow through 2021 – although some segments may take a tad longer – amidst resilience as the vaccine is deployed, which beckons the world back to ‘near normalcy’.