Real estate attracts Rs 24,000 cr investment in H1: JLL

The real estate sector attracted an investment of Rs 24,011 crore during the first half of this year, led by IT, commercial realty and retail, indicating a revival in the sector. Institutional investments in real estate from 2013 to 2017 also increased at a CAGR of 63 per cent to a cumulative $ 20,971 million or Rs 1,43,850 crore, real estate consultant JLL said today.

“There has been a paradigm shift in the momentum of real estate witnessed in the first half of 2018. All aspects of the sector – residential, retail, office and investments, have seen healthy increase in demand. What we note specifically is the quantum of this rise which has increased significantly, ushering a revival of the sector backed by strong fundamentals,” Ramesh Nair, CEO & Country Head, JLL India said at the CII Realty and Infrastructure Conclave here.

The first half of 2018 saw corporate leasing activity rise by 54 per cent as compared to the same time last year. This trend, driven by large technology companies, co-working, financial services and global in-house data centres is a reflection of the current thriving business environment, JLL said.

Occupiers are not only inclined towards space take-up as part of their consolidation/relocation plans but also geared towards expansion-driven space strategy which is a pointer towards an upswing in the business cycle. Companies leased around 8 million sq ft more space as compared to last year, taking the total gross space leased in the H1 2018 of the year to about 24 million sq ft. Cities that contributed the most to this growth were Bengaluru and NCR, with a share of 26 per cent each in the gross leasing volumes during this period, Nair pointed out.

The first half of 2018 was also significant in terms of sales velocity for the residential sector, which was up 25 per cent year-on–year. “This can be attributed to two large factors. Firstly, returning buyers’ confidence on account of implementation of RERA in most states and stable capital values that have started to show an upward trend. The general consensus is the markets have bottomed out and capital values are now expected to move northward. This has pushed many fence sitters and new home buyers to take purchase decisions,” Nair said.

In the retail sector, net absorption in H1 2018 for retail space has seen a rise of over 75 per cent year-on-year, recording a total absorption of 1.9 million square feet. The retail market has also seen a growth in leasing activities from both international and domestic brands, JLL said.