What's trending in Real Estate? Spotlight on India

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SPOTLIGHT ON INDIA

Each quarter, BDO USA spotlight real estate industry trends and happenings in key international markets. For Spring, we spoke with Nidhi Seksaria, BDO India’s Real Estate & Construction leader. India is on the brink of major changes, including the nation’s first REIT offering, as well as impactful new legislation and regulations.

Read on for Nidhi’s take on these and other factors that will shape the Indian real estate market this year.


How is the market performing over the last year, and what are some of the key real estate sectors?

The Indian markets have been relatively sluggish in the past few years, but individual asset class performance has differed.

Overall buyer sentiment has been very cautious in anticipation of significant price cuts, which has led to low sales volumes and limited capital appreciation in the residential sector. The recent demonetization drive by the government has also adversely affected some players and added to the slowdown in the movement of residential properties.

On the other hand, demand for commercial properties has been on the rise over the last 12-18 months. There is increased leasing activity as a result of new demand as well as increased demand for relocation and consolidation. Rents have remained firm due to the current limited availability of premium space. In anticipation of REITs listings, there have even been some large transactions on the acquisition front.

On the retail side, the Indian market mirrors the global e-commerce trend, and as such, mall rentals have been under pressure. However, leasing activity continues with some large space uptake from the food and beverage and entertainment sectors, as well as some large brands which have continued to expand their physical storefronts in India.

The Indian government is working to promote investment in the affordable housing sector by offering various concessions, including tax relief to developers and interest rate subventions to buyers. Warehousing and logistics will be a key emerging sector to watch in the coming months and years with increased interest from investors.

Nidhi also offered views and advice on the Indian budget, Blackstone's REIT offering (the first in the Indian market) and the RERA act...READ THE FULL ARTICLE HERE

  • What are the main provisions in the recently announced Indian budget that could impact the markets and the real estate industry?

  • What’s the market sentiment like leading up to the first Indian REIT offering by Blackstone, and how do you think REITs will perform?

  • What does the passing of the Real Estate (Regulation and Development) Act in 2016 mean for real estate companies and the broader market?


Nidhi Seksaria is an advisory partner and Real Estate & Construction leader with BDO India. She can be reached at nidhiseksaria@bdo.in. Read more with BDO USA here.