We are living in a 'shared economy phase' now. Auto Sales are dropping on account of rising preferencefor Uber and Ola for commuting; home sales are dropping due to high prices and increasing preference of young generation for renting rather than buying.
Co-living is the latest buzz word in real estate sector today. Yes, it is a very promising segment and evolving very fast in India, particularly in major cities which attract migrant professionals and student every year.
India's first Real Estate Investment Trust (REIT) - Embassy Office Parks "REIT" backed by realty developer Embassy Group and US-based Private Equity firm Blackstone Group LP, raised INR 4,750 Cr through issue of units at INR 300 a unit.
As a growing economy with a population base of 1.2 billion, India is currently facing the crisis of urban housing shortage. According to our research, India's urban housing shortage is now at 61.91 million units with a rural to urban breakup ratio of 70:30. In 2015, the Central Government launched Pradhan Mantri Awas Yojana (PMAY) to address the demand and supply gap.
E-commerce sector in India is expanding at brisk rate. The funding world has witnessed multi-billion dollar transactions in this space and same trend is expected to continue. This segment requires different scale of warehousing infrastructure for supply chain management and one of the requirements is small distribution centers. In coming years requirements of small distribution centers across the city will grow multi-fold.
Opportunities in traditional real estate segment will remain, however, newer segments will witness increased interests and investments on account of huge untapped demand.
Bangalore Metro Phase I was fully operational in June 2017; it is a significant milestone considering the crumbling infrastructure scenario in the city. The completion of the interchange between the East-West and the North-South lines at Majestic has reduced travel time along these lines by half as compared to any other means of transportation. As on October 2017 the ridership has reached around 4 lakh commuters. With a frequency of one train every 5 minutes during peak hours, the ridership is expected to increase to 5L passengers by the end of 2017 and a million by 2018.
Today real estate is witnessing optimization of spaces and aging commercial developments are offering an opportunity to the owners to evaluate newer development options for their properties. Growth of real estate developments in India started in early 1990s and top 7 cities of the country today have significant office space stock which is more than two decades old.
The completion of Namma Metro Phase I and the inter-connection between the East-West and the North-South lines of the metro rail at majestic has revived real estate interest in the locations along the Metro corridor, especially in Bangalore West. While IT/ITeS developments have been strong in South, East and North of Bangalore, the west has been an industrial location. As a result, job creation has been limited and so has real estate activity. With improved connectivity on account of the completion of Metro Rail Phase I, this micro-market is witnessing renewed interest both from developers and end-users.
'Coworking' is the latest buzzword in commercial real estate and the segment has witnessed immense growth fuelled by the start-up boom in India. In the last two years more than 350 players have forayed into Coworking segment. In Bengaluru, the total leased space occupied by Coworking segment have increased from 0.13 mn Sft in 2014 to 0.52 mn Sft in 2016. By 2020, the total space leased by coworking segment in India is expected to be 8 mn Sft.
Today, traditional fixed-income investments do not provide the desired returns as they did in the past. Real estate has been an integral part of an investor's portfolio primarily on account of stable cashflow returns, diversification benefits due to low correlation with other asset categories.
India is witnessing rapid urbanisation and more youngsters are migrating every day from smaller towns to urban centres for education and work. IT/ITeS has been a major sector to employ young professionals in Bengaluru, Chennai, Mumbai, NCR, Pune and Hyderabad, fuelling the need for 'Professional Housing' in these cities.
Integrated Townships are self-sustaining mixed-use developments with residential as the predominant use along with a mix of other complementing uses such as commercial, retail and social infrastructure such as hotels, clubs, schools, parks and hospitals.
East Bangalore comprising of Outer Ring Road (KR Puram to Iblur), Sarjapura Road, Varthur and Whitefield micro-locations has emerged as prime office destination and accounts for 47% of the commercial office stock in the city. Most of the IT/ITES companies in Bangalore have large office set-ups in East Bangalore and prefer the location for expansion and consolidation.