The year 2016 is expected to present several opportunities and challenges for the business and investment community in the region, says a report by CBRE.
The report “India’s Real Estate Market Outlook 2016” is part of CBRE’s Asia Pacific Markets Outlook Report series. CBRE forecasts that Asia Pacific’s steady economic growth will continue to outpace the rest of the world in 2016.
On the domestic economy front, meanwhile, India’s growth is also expected to surge forward and will continue to remain as one of the fastest growing economies in the world.
While the year 2015 had ushered in numerous reforms across sectors, high hopes are also riding on the Union Budget 2016 with respect to key policies and reforms. This translates into a positive outlook for the real estate sector with opportunities for landlords, tenants and investors alike.
The Government of India’s monetary policy is expected to remain accommodative. India’s economy in 2016 will be among the fastest growing in the world, generating significant interest from investors and corporates. The Government is expected to focus on instigating structural reforms in the year ahead; and with inflation being broadly under control, its monetary policy is expected to remain accommodative.
Suburban and/or peripheral micro-markets of leading cities preferred by corporate real estate occupiers. Corporate office occupier leasing remained strong in the suburban / peripheral micro-markets of the leading seven cities, with office space occupiers continuing to focus on pre-leasing spaces in under-construction projects amid a lack of available quality space.
Anshuman Magazine, Chairman and Managing Director of CBRE South Asia says, “India’s real estate investment market witnessed a bullish run with increased interest from institutional investors in 2015, with the inclination of investors remaining focused on well-organized and well leased assets. Going forward, the realty market in India expects to see a positive year ahead.”
The industrial and logistics real estate space is expected to attract healthy demand. Healthy leasing activity is expected in the logistics and warehousing sector from traditional demand drivers such as Third Party Logistics (3PL) players, engineering and manufacturing firms, renewable energy players and Fast Moving Consumer Goods (FMCG) companies, along with large sized space take-ups from e-Commerce players.
India likely to remain among the most favored marketplaces for international retailers in 2016. In the retail real estate space, F&B, fast fashion and entertainment segments are expected to drive demand for store space. With more than 22 global players having launched their retail operations in India in 2015, the country will continue to remain high on the radar of global retailers in 2016 as well.
