Mindspace Business Parks REIT raises INR 650 Crore (6.5Bn) Sustainability Linked Bond Issuance that has been placed with International Finance Corporation (IFC), the private sector arm of the World Bank Group. The coupon of the bond is linked to Mindspace’s commitment to achieve certain ESG targets towards building a greener eco-system.
A recent report claims current sentiment index score of Indian real estate is 72. I wonder how! Who is going to believe this? Definitely not the home buyers at the receiving end of the builders with delay, default, unmet promises and what not. But this is not an isolated instance of one-odd such report. As a matter of fact, most of the reports by the brokerage firms (in the guise of consulting firms) and other industry stakeholders would like the home buyers to believe that if you don’t buy property now, you would be left behind. This unnecessarily creates a FOMO (Fear of Missing Out) in the minds of the gullible buyers.
Owing to rapid industrial growth and the emergence of one of the fastest growing real estate segments in the country, India’s warehousing sector is set to cross the 300 million square feet (MSF) mark by 2025, according to a report jointly launched by CREDAI and CRE Matrix. Currently, the overall Grade A warehousing stock stands at 216.2 MSF. In Q1 CY ’24, India witnessed a 5% increase in rentals – reflecting how India’s warehousing demand continues to surpass supply – with the absorption to supply ratio standing at 1.4 in the quarter.
Explaining the decent but not impressive quarterly performance, compared to the industry peers, the CEO of a listed real estate developer justified it with heavy concentration in the residential portfolio. According to him, the diversified portfolio of industry peers with income producing commercial spaces gives those companies an edge. More than an answer over his company’s performance, Track2Realty feels the statement raised an all important question: Does diversified portfolio give an edge to realty companies.
GCCs have become an important catalyst for change in the Indian office sector. With 1.3 mn talent as of 2019, the sector saw a 30–35% share of total office leasing in India in 2017-2019 period with over ~1250 operational GCCs. Between 2020-2022 period, GCCs accounted for 38–43% of the total leasing, housing over 1580 operating GCCs with a talent pool of 1.66 mn as of 2022. We anticipate that during 2023-2025 period, the GCCs will account for a significant 35–40% of the total office leasing. Moreover, India has been a leader in the growth of GCCs, expected to host over 1,900 GCCs by 2025 with a professional talent pool that exceeds 2 mn.
When you read in the media that the housing market is on fire, you get pessimistic with FOMO (Fear of Missing Out) gripping your investment strategy. When the market speculators suggest the house price might drop, you rush to sell and/or put your buying decision on hold for a better deal. Track2Realty analyses whether home buyers can time the market.
Housing project is approved by the government agency; RERA; and banks & financial institutions! Shouldn’t this be enough to instil confidence of the home buyers that the housing project is safe to invest? How could otherwise a builder with poor execution capabilities or fiscal imbalance cross the three eyes of scrutiny and dodge the bullet at each and every level of checks & balances? Track2Realty questions as to who is the custodian of due diligence in the housing market?
Nationwide, market rentals across Grade A spaces continued to increase, nearing the INR 100 per square feet milestone, with an 8.7% QoQ increase in Q1 CY 2024. The disparity between market and existing rental rates expanded to approximately 14%, signalling a robust landlord-centric market environment. Specifically, Bengaluru, Pune, and Hyderabad experienced an uptick in rental rates during Q1 CY’24 compared to the preceding quarter.
The median age of the country is likely to gradually increase from about 29 to 38 by 2050. Similarly, the proportion of aged people (above 60 years) is likely to increase from about 11% in 2024 to 21% in 2050. At the global level, over the next three decades (by 2050), of the 2.1 billion people above 60 years, India would account for a 17% share indicating a significant demand growth for senior care including housing in the country.
With global corporates increasingly seeking to optimize resources, maximize savings, and drive growth, India offers a compelling proposition. During Q1 2024, India continued to witness traction in GCC leasing activity. A significant 5 million square feet (msf) of leasing activity by GCCs, represented 37% of total office leasing across the top six cities. Looking ahead, GCCs are projected to lease between 45-50 msf of office space in the next two years, constituting around 40% of total demand.