Looking at 2023 and its real estate stamp, “Comprehensive victory”; “Nothing succeeds like Success” … are just some of the adages that come to mind.
From the vantage I see, it has been the year that put Residential real estate firmly on its decadal ladder of growth and the spoils of the ascend will continue its stellar run for at least till 2025 before plateauing and consolidating for the next high.
Industrial and Industrial Format Office which have had a dream run for the last 5 years clearly are running out of steam and would see a spectacular cooling as they prepare for a long winter ahead nuanced by low vacancies, pricing pressures and ghost stock. This perhaps will be the only sector in the larger Urban Built Environment which will stand out for its sluggishness and given the concentration of foreign capital in this segment perhaps will paint the opinion adversely till the denials face their classic “Cancel Culture” moment.
As we move away from the mainstay asset classes, the resurgence in Specialty Living, be it Hospitality, Student Housing or Assisted Living will form the next beacon of hope as will the revival of Healthcare real estate and Education to complete the Social Built Environment.
The action is also visibly shifting out of the top 7 cities which have traditionally monopolized investment and attention, comprehensively to State Capitals and Economic Corridors in the Teir 2 cities. The rapid infrastructure built over the last decade has connected more cities with over a Million population in India then possibly in the entire Europe and that is just the first few green shoots of a Hinterland that would soon become the Heartland of investments and attention.
Road, Rail and Air Connectivity coupled with a robust Digital Ecosystem and a Financial Inclusion Movement that has redefined India over the years is at the right footing to script the resurgence of Tier 2 marketplace. The sheer volume and pent-up demand across the length and breadth of India has the ability to add more to the Built Environment than perhaps the entire developing world put together…
Election trends in the recent state election and the direction they portray for the coming central elections clearly point to a stable and assertive political environment which should continue to drive investments and challenge limits of execution. More importantly the regulatory impetus the sector will receive through continuous improvement in the REIT/INVIT regime and more so with the introduction of “Small and Medium REIT” regime will lay the enabling ground for retail participation in the sector unlike any seen in the past.
With a clear shift in investments from the Mass Affluent category into Real Estate linked instruments, the liquidity and home market bias will democratize growth and lend a large stable base for the sector beyond the known comfort of large cities which foreign capital has so far been romancing, now to death almost!
2023 will be remembered as the watershed year that re-rated the entire Real Estate Industry, challenged the old norms and set a new doctrine that will see the sector grow into the bulwark of economic progress that it always was meant to be.