The widespread of COVID-19 pandemic has badly impacted the graph line of the Indian real estate market. The sector, especially the residential segment has already been facing low demand from consumers, project delays, and continuous regulatory changes for the past few years. Now, Coronavirus impact on the sector flags a red signal heavily impacting the business in its wake.
From L to R: Rishabh Golchha, Arpit Parakh, Aniket Bharadia, Harshit Agrawal
Leading experts from the real estate market discussed the commercial real estate outlook in India through a webinar, organized by PropCatalyst, an online tech-enabled investment platform which allows you to own Grade A pre-leased commercial properties without the hassle of managing it.
“The Indian office space is 600 million square feet only, as compared to other nations. Right now, the market fundamentals are vacant; demand may drop to 15-20 per cent as per the current situation. We have seen across all the downturns, the sector which comes up first, in a V shape, is always the office sector,” shared Ramesh Nair, CEO & Country Head, JLL India.
Dhaval Ajmera, Director, Ajmera Realty said, “The sector could see a delay of 3-6 months, but the production and consumption pattern will take place gradually. After the pandemic is over, India will become a key market and opportunities will grow.”
Aniket Bharadia, Co-founder, PropCatalyst said, “We believe that companies have deferred plan for this year, and compares the situation to the economic recession of 2008. We are confident that India will rise sharply and other countries will invest and look for spaces in India.”
Neeraj Bansal, Partner & Head Corridors, KPMG India believes, “We are in the middle of a prolonged situation thus, it will take time for developers to resume construction. There will be a reduction in rental construction, the sector will witness defer in the demand and supply chain. The co-working space will be impacted too, as companies will follow social distancing.”
“At this point of time, anguish will be at its peak. It’s important to understand that largely for retail investors, the short-term resolution is to stay away, which can’t be controlled. In real estate, we all have to see how to distress the structure will open out in the long run. India has always taken advantage of the crisis and this time also; a lot of new business models will come out as far as the real estate is concerned. It will get a better slice, the issue is pertinent for short term only,” said Karthik Rajaram, Co-founder & Managing Director, Xanadu Group.
Ritesh Malik, Founder, Innov8 Coworking said, “Post-COVID, we will see an environment that people would want to have offices near their homes, and this will lead companies to tie-up with co-working spaces at multiple locations in the long term.”
Aniket Bharadia, Co-founder, PropCatalyst shared the business model of the company, “The idea behind PropCatalyst is to make investing in top quality real estate more accessible for the mass investor audience. This helps to build high yield passive income for investors, so the cashflows are monthly, and the underlying assets give a good chance of Capital Appreciation as well. Even during the current financial troubles, PropCatalyst has been able to give out the rent to its investors because of having invested in assets with top quality multinational tenants.”
He explained further “Commercial real estate is not accessible to the masses due to its higher ticket sizes, so we provide ownership to various investors through fractional ownership. Each investor shares the ownership in the property based on the investment amount. The benefits of this ownership are that it provides, Grade ‘A’ premium properties, portfolio diversification, capital appreciation, higher liquidity and superiors ROIs.”
PropCatalyst is an online platform, which provides fractional ownership opportunities in pre-leased (high yield) institutional-grade commercial properties. It provides accessibility to Grade A properties with lower ticket size via fractional ownership model.