Online Retail is the least impacted sector in the ongoing global health crisis and will recover the fastest while Warehousing and Industrial, the new sunrise sectors, will see an exponential growth post the pandemic, said Anurag Mathur, Chief Executive Officer, Savills India at a CII virtual event organized in partnership with the international property consultant
The virtual conference Resurgence: Real Estate 2020 was hosted to bring together industry leaders and discuss the growth potential of the Indian real estate market particularly commercial office and manufacturing sector in the wake of COVID-19.
The conference was graced by chief guests – Durga Shanker Mishra, Secretary, Ministry of Housing & Urban Affairs, Government of India and Dushyant Chautala, Deputy Chief Minister, Government of Haryana along with industry experts from across the real estate sector.
Savills India, the exclusive knowledge partner of CII for the session, highlighted the challenges faced by the real estate sector caused by the ongoing pandemic and also expressed a positive outlook across various sectors given the availability of educated workforce, government initiatives & policies, manufacturing solutions and technology in India.
“We are currently living through an event that the world has not experienced in its living memory and we could not have thought that this could come true in this day and age. We have every opportunity to come out of this crisis stronger, better and looking forward to the next decade of solid growth,” said Mathur while speaking at the inaugural session of the event.
He also highlighted that despite the current dip in activity in the commercial office space, the segment will bounce back driven by India’s availability of talent pool and low rentals as compared to other major global office markets.
“The Indian government has implemented several initiatives to drive our manufacturing competitiveness. At this point, the world is looking at China plus one strategy for manufacturing solutions. Over the last few years, India’s position in the global competitiveness index only strengthened,” he said.
Srinivas N, Managing Director, Industrial and Logistics, Savills India, also pointed out that India is emerging as an alternate manufacturing destination to China. “Indian manufacturing sector has gone through major transformation helped by some significant reforms announced by the government in recent times. Strong macro-economic fundamentals, growth potential, demand potential, continued availability of skilled labours and improvement in the ease of doing business will lead to the sector’s growth.”
Speaking at the inaugural session, Sophie Chick, Director World Research, Savills said, “It is important to remember the world was already undergoing many upheavals before the emergence of COVID-19. The potential impact of the pandemic is accelerating certain pre-existing trends such as the positive change in working practices, reduced commute, demand for residential property, and increased online retail. Enabled by government policies, new technology and industries, the innovation displayed by the real estate industry during the pandemic now needs to be applied to issues such as climate change caused by carbon emissions.”
During the virtual event, industry leaders spoke about the various aspects of Indian commercial office market in the wake of the pandemic. The common areas like food courts will change significantly with the need to maintain social distancing norms. Health and safety will become the most significant aspect while occupying office space, experts agreed.
Naveen Nandwani, Managing Director – Commercial Advisory & Transactions, Savills India added, “Hybrid culture and work from anywhere will be prevalent. But one thing is for sure, this year there will be a pause. From an absorption point of view, there will be around 40-45% drop this year compared to 2019, which was India’s biggest year ever seeing absorption close to 60 million sq.ft. However, India has the quality and the quantity of talent and we will bounce back for sure”.
The conference concluded on a positive note with all participants expecting the real estate sector to bounce back after a couple of quarters.