Warming Up To a Stupendous Year for Commercial Realty
Shishir Baijal, Chairman and Managing Director, Knight Frank India In India, at the dawn of 2020, we were warming up to a stupendous year with commercial real estate segments of office, warehousing, and retail on a healthy growth trajectory. The residential market was also attempting to stand again on its feet after a spate of structural readjustments of previous 2-3 years. Then came the COVID-19 pandemic and associated lockdown – amongst the most stringent in India – which brought business activity to a complete standstill. In the second half of 2020, as we saw gradual lifting of the lockdowns and increased awareness about responsible handling of the coronavirus threat, consumers, particularly in the housing segment, have comeback with a renewed vigor. Time bound and focused government interventions also served as a catalyst to rekindle the market sentiment. In 2021, as consumers and businesses move ahead - responsibly managing life and livelihoods amidst this pandemic uncertainty - market trajectory will meaningfully improve compared to 2020. Housing sector, with its latent demand potential and much better demand dynamics, is expected to lead the way. Commercial office and warehousing sector, on the back of their strong fundamentals, will retain the past glory. Within the commercial segment, Data Centers, will emerge as a shining star as strong demand dynamics will enjoy the tailwinds of right policy attention. Overall, we expect 2021 to be a year of reckoning for the Indian real estate sector. India’s long-term economic fundamentals remain strong, despite the interruptions caused by the COVID- 19 induced lockdown. We expect the growth momentum to return and are witnessing new avenues develop that will be propelling India economy and commerce, in turn, impacting the real estate fabric of the country. Some of the high potential sectors that Knight Frank India will look at making early headways are Data centres, Pharmaceuticals, Warehousing and Logistics, E-commerce etc.
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