Roundup: Biggest Real Estate Market Developments in India and Hyderabad

As India continues to deal with the ongoing effects of the COVID-19 pandemic, the country’s real estate sector is performing well. After a down cycle over the last six years, the property market is finally rebounding. The market previously saw a downturn due to the 2016 cash ban which hurt demand, a bad loan crisis, and the pandemic.

Real Estate Growth in India

The most significant policy decision taken by the Indian government.

Rebound of Indian property market

Record low interest rates, a progressively more affluent middle class, and an economy that is slowly but surely from the pandemic’s demand have seen India’s real estate sector performing favorably in comparison to the US, China and other key South Asian nations.

Direct investment in Indian real estate and ownership

The decision to extend industrial corridors is one of the most important policy decisions taken by the Indian government. Real estate investment topped $1.35 bn in Q2 2021, reflecting a nine-fold increase. The first six months of 2021 saw investments totaling $2.7 billion, which is 53% of the total investments seen in all of 2020.

Inflows into built realty assets totals $2.4 billion

Office sector investments in the country, totalled 35% of the total investments in the first half of 2021, as many businesses look to adopt hybrid work models in lieu of the pandemic.

“Office assets will continue to gain fervour from investors due to the steady returns from the asset class, and opportunity to bundle the assets under a REI.” , ”Global funds are also looking to form investment platforms with developers, as they look to build their capabilities in sectors such as industrial and warehousing space, buoyed by the growth in e-commerce and the need for same-day delivery.”

e-commerce companies have increasingly been searching for logistics spaces, which led to 27% of a share during H1 in 2021, with inflows into built realty assets totalling $2.4 billion in H1 2021 - a 52% increase over the same time last year.

Small town realty sees a boom

While India’s real estate markets tend to be more metro-specific, smaller towns are seeing increasing growth. According to a report by Ficci and CBRE, the real estate services firm, cities like Ahmedabad, Chandigarh, Coimbatore, Kochi, Indore, and Jaipur will see a rise in flex office stock.

In metros, gated communities and villas are doing well, while those who cannot buy homes are choosing to purchase plots of land.

Real Estate Growth in Hyderabad

As more developers are looking to set up offices, residences, and commercial complexes in nearby areas of the IT corridor in Hyderabad, there is a major real estate boom. The state government’s industry-friendly policies, infrastructure and competitive prices are facilitating growth.

Hyderabad’s IT corridor gets a boost

Previous e-auctions of land parcels in Kokapet and Khanamet brought in Rs.2,700 crore for the state government. The Telangana government is now looking to e-auction an additional 35 plots spread across 117.35 acres in Khanamet and Puppalaguda at Rs.35-40 crore per acre. This could fetch the government a minimum of Rs.4,000 crore on September 27 and 28, with the pre-bid amount for both the sites set for September 25. Prospective buyers can visits the sites from September 1 to September 24.

Real estate investments in H1 2021

The city has attracted Rs.2,200 during H1, from January to June, 2021 which was 12.89 percent of the total investments during the same period in India.

“Hyderabad has emerged as a favoured investment destination especially for office and residential assets. During 2015-2019, Hyderabad has recorded the highest growth in private equity investments compared to the preceding five-year period.”