this week's edition
Greetings, Real Estate Enthusiasts!
In this week's edition, we delve into the H1 2023 analysis of the warehousing and industrial sector, providing insights into its trends and growth areas. survey of Real Estate supply-side stakeholders offers valuable perspectives on current market conditions for the next six months. Additionally, we highlight crucial risk factors in CRE investments and share strategies for risk mitigation. Stay ahead in the ever-evolving real estate landscape with our curated insights.
Warehousing & Industrial H1 2023:
During the first half of 2023, the demand for industrial and warehousing spaces in India saw notable shifts. Third-party logistics (3PL) remained at the forefront of demand, but there was a substantial increase in leasing activities by Fast-Moving Consumer Goods (FMCG) and engineering firms across major markets in the country. Particularly noteworthy was the resurgence of demand from E-commerce, which surged by an impressive 68% year on year after a period of relative stagnation.
Several factors contributed to the overall growth in demand for industrial and warehousing facilities. These included the expansion of production capacities, robust government policy support, and the adoption of automated and process-driven manufacturing practices.
While 3PL players are expected to maintain their dominant position in driving demand, other segments are projected to experience strong and steady momentum in leasing activities as well.
"In the face of challenging global economic conditions, India's industrial and warehousing sector demonstrated remarkable resilience during the first half of the year. Thanks to favorable demand and supply dynamics, the vacancy levels saw a significant decline of 110 basis points, reaching 10%. Consequently, the overall rentals experienced a slight increase. India's impressive economic indicators are exhibiting promising signs of progress, characterized by consistent growth in manufacturing output and investment. These positive developments bode well for the sector in both the short and medium term."
Source: Colliers
Looking to Invest in CRE, Read my article on key Risk factors to evaluate before Investing: click on the Image
Knight Frank India - NATIONAL REAL ESTATE DEVELOPMENT COUNCIL (NAREDCO) Real estate sentiment Index for Q2 2023:
?this INDEX is based on a quarterly survey of key supply-side stakeholders which include developers and non-developers, i.e. financial institutions including banks, Non-Banking Financial Companies (NBFCs) and private equity (PE) funds.
A score of 50 represents a neutral view or status quo; a score above 50 demonstrates a positive sentiment; and a score below 50 indicates a negative sentiment.
Current Score:?
In Q2 2023, the Current Sentiment score scaled up from the previous quarter's 57 to 63, both comfortably in the optimistic zone. This is due to the continued resilience of the Indian economy amid a recessionary environment globally.
领英推荐
?? The Current Sentiment score signifies stakeholders' current outlook in comparison to the preceding six months. The Current Sentiment score's increase reinstates stakeholder confidence in the Indian economy and the real estate sector's performance.?
Future Score:?
During Q2 2023, the Future Sentiment score increased from 61 in Q1 2023 to 64 in the optimistic territory as India's macroeconomic indicators remained firm, despite monthly variations.
Zonal wise: Q2 2023 Future Sentiment scores surged in all zones except South Zone.
Residential:
Office: 47% expect office supply to improve in the next six months (up from 43% in the previous quarter).
?45% expect office rents to increase (compared to 38% in the previous quarter).
Overall economy and funding: Stakeholder sentiments on overall economic momentum have strengthened with each passing quarter, with 55% of survey respondents in Q2 2023 expecting an increase, up from 52% in Q1 2023.
Receive this Indian CRE weekly in your email every week: https://eepurl.com/h_TJ59
have a Great Week!