Real Estate in 2020: The year 2020 was about learning new things, changes and emerging trends. The worldwide epidemic did not leave any sector and forced businesses to adopt change. People’s priorities changed. Safety and hygiene became the main criteria. Many things were learned. Commercial real estate developers started working according to the changing needs of the people.
Corona and lockdown
Commercial real estate has been a preferred investment option for decades. Long-term price increases and rent, which are higher through residential or other savings or investments, make it an attractive option. The sector strongly fought the lockdown, fall in the cell, leasing caused by the epidemic. The national lockdown announced by the government led to a temporary decline in leasing work, after which the situation has been improving rapidly for the last few months.
Reform measures by the government
Due to recovery in demand, the government unlocked, improved measures, increased demand, shopping in the festive season, better prices, lower prices and easy availability of finance. The big change was the announcement of a cut in stamp duty to increase the demand of the Maharashtra government. The stamp duty reduction was a well thought out and timely move. By 31 December, stamp duty is 2 per cent and for Jan 20, March 2021, it is 3 per cent.
The central government announced a change in the IT rule and by 30 June 2021, the difference in circle rate and agreement value was reduced to 20 percent. The move will help developers sell inventory where prices are low and circle rates are high.
Core industry sluggish for 9th consecutive month, production dropped 2.6% in November
Road to recovery
Commercial real estate is an asset class for long-term investors and HNIs. This is because there is an advantage of permanent rent in urban metros. It has been seen that despite the decline in leasing and sentiment towards the sector, REITS and long-term investors have still kept the sector good. According to a report by Knight Frank India, the office sector still remains a favorite of investors as the Indian office market has strong bases.
The segment has attracted around $ 15.4 billion since 2011. In the year 2020 alone, the commercial real estate segment accounted for 81 per cent of the total private equity investment. Private equity investment in office in 2020 is expected to outperform the previous year’s figures. Recovery in unlocked and economic activity is expected to lead to a strong recovery of real estate in 2021.