Real Estate News: Home Sales Jump 13% QoQ: Report
The report highlights the growth, trends and dynamics of various segments of the real estate industry in India.
The share of the affordable/budget segment in sales remained stable at 27% in Q1 2022 compared to Q4 2021. While sales of the premium category jumped to 23% in Q1 2022 compared to 16% in Q4 2022, those of the midscale segment fell to 41% during this quarter. The high-end and luxury housing segments also saw an uptick in sales on a QoQ basis.
New unit launches jumped nearly 30% year-on-year to cross the 60,000 unit mark in the first quarter of 2022. With shares of 43% and 30%, the midrange and high-end categories dominated the new launches in the country.
“The residential sector is poised for a strong 2022 as sales and new launches are expected to show strong performance after showing resilience last year. Continued government policy (particularly towards affordable and mid-range segments), improved vaccination coverage, resumption of economic activity coupled with attractive mortgage rates are likely to contribute to strong sector performance residential,” said Anshuman Magazine, Chairman & CEO – India, Southeast Asia, Middle East and Africa, CBRE.
The report also pointed out that cities in the west of the country continued to drive sales as well as unit launches. Pune led home sales in the first quarter of 2022 with a 27% share, followed by Delhi-NCR (21%), Mumbai (20%) and Bangalore (14%). In terms of unit launches, Pune led among cities with a 29% share, followed by Mumbai (22%) and Hyderabad (20%).
“While we believe the midscale and affordable categories would continue to drive sales, the upscale and luxury categories have also seen renewed interest from investors, fueled by anticipated appreciation in capital value and increased activity of HNIs and NRIs,” said Gaurav Kumar and Nikhil. Bhatia, Managing Directors of Capital Markets and Residential Affairs, CBRE India.
In the office segment, the positive rental dynamic should strengthen further.
Addition of supply in the first quarter of 2022 hit nearly 9.4 million square feet, down about 11% year-on-year and 41% quarter-on-quarter, while leasing activity recorded 11 .4 million square feet, up 97% year-on-year but down 25% quarter-on-quarter.
Small to medium-sized deals (up to 50,000 sq ft) dominated space occupancy with nearly 84% share in Q1 2022. Bangalore, followed by Hyderabad and Chennai, dominated the offering, with a combined share of 70%
Leasing activity is expected to strengthen further in the coming quarters due to a combination of pent-up demand and expansion/consolidation-focused leasing as occupiers begin to realign their post-pandemic business strategies.
In the industrial and logistics segment, Tier I cities lead the sector’s upward growth trajectory and I&L leasing activity grew approximately 19% year-over-year to 6.5 million square feet in the first quarter of 2022.
Delhi-NCR led the uptake with a 27% share, followed by Mumbai (21%) and Kolkata (16%). Demand for space is expected to touch approximately 35-37 million square feet, driven by the continued expansion of e-commerce and 3PL players amid macroeconomic recovery and increasing online retail penetration.
In the retail segment, malls and prime shopping streets are expected to remain the most sought-after locations. Rollover to these key destinations may allow some retailers to establish/expand in these locations and malls.
At nearly $1.4 billion, capital inflows increased 24% quarter-on-quarter in the first quarter of 2022. With a 38% share, development land/sites led investment; followed by the office (35%) and retail (19%) sectors.
Mumbai, Delhi-NCR and Chennai together accounted for around 64% of the total investment amount in Q1 2022, while institutional investors led the investment activity with a share of almost 50%, followed by developers (38%) .
An increase of 5-10% year-on-year is expected compared to the investment value of 2021; greenfield assets likely to experience a sharp uptick in investment.