Realty Bites

The real estate sector is still bleeding, but government sops have given it a ray of hope.

- Manu Balachandran

13.5 lakh units were sold in five years. The unsold inventory rose from 6.98 lakh units in 2014 to 7.9 lakh in 2016 before coming down to 6.73 lakh in December 2018.

As far as commercial real estate goes, data from Anarock indicates that total absorption across the top seven cities in five years crossed 168 million sq ft, increasing year-on-year, with only 2016 seeing a decline of 8 percent. In terms of supply, the seven cities saw over 162 million sq ft new office stock added between 2014 and 2018. There was a 19 percent increase in 2018 compared to the preceding year.

As an investment opportunity, the residential real estate sector hasn’t garnered much attention as yields continue to be low.Estimates peg them to be between 2 percent and 5 percent. Commercial properties, in comparison, get between 8 percent and 10 percent.

“The commercial real estate segment has been performing well for the past couple of years, as global and Indian corporates continue to enter and expand their footprint across the country,” says Anshuman Magazine, chairman and CEO, India, Southeast Asia, Middle East and Africa, at CBRE, a global real estate consultancy. “India’s strategic advantages of cost and availability of talent and real estate have ensured that despite a volatile external environment (particularly the global economy and US’s anti-outsourcing stance), the country’s commercial sector continues to perform well.”