Real estate activity has picked up momentum with unlocking of all activities across India. This has resulted in pre-Covid deals that were dormant to be consummated and new interest being generated in the market, said Ajay Sharma, Managing Director, Valuation Services-India, Colliers International.
“However, demand played a large factor in guiding the growth plans of occupiers and investors which is yet to reach pre-Covid levels,” he added.
As a result, the cap rates in commercial assets remained the same quarter on quarter (qoq), while the retail cap rates in some geographies showed upward movement indicating eroding value due to increased vacancies and rents being renegotiated.
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“The bright spot continues to be industrial assets, with the increase in interest resulting in rents modestly appreciating and vacancy levels holding in spite of new supply,” explained Sharma.
According to Siddhart Goel, Senior Director & Head of Research, Colliers India, “The commercial office market has started improving since Q3 2020, and we expect the market to recover post June 2021. We believe that demand for office space will be run by technology companies, especially for their global in-house centers.”
He further said “Suburban and peripheral office locations will continue to garner traction, and occupiers will look to adopt a hub and spoke model for ease of employees. While rentals have dropped in cities like Delhi-NCR and Mumbai, cities like Bengaluru, Hyderabad and Pune continue to be resilient.”