Commercial real estate, which was going steady and upward in contrast to the residential segment, is expected to face setbacks owing to coronavirus pandemic. According to a recently released report COVID-19: Impact on India Real Estate by Collier, the momentum in the absorption of office space may be slowed down considerably in H1 2020.
While India has been less affected by COVID‐ 19 than East Asia, since March 2 the virus has been spreading here too. As the virus continues to spread in the country as well as globally, here are some of the impacts expected on commercial real estate.
- In 2020, as much as 54.3 million sq feet of gross absorption of commercial office space take is expected. Although there may not be a major impact on office demand due to coronavirus, decisions over commercial space take-up are expected to be delayed or postponed until the pandemic dies down.
- Office take-up deals can be pushed back by three to six months as key decision makers may not visit India in the backdrop of travel restrictions which are expected to last a while.
- Delayed capital deployment due to delayed decision making
- Construction delays also expected owing to supply chain disruption of imported material and fittings
- In 2019, institutional investments from Singapore, Hong Kong and mainland China together alone accounted for 28 percent of total real estate investment in India. However, such investments are surely going to slow down for next couple of years.
- Startups are seen encouraging employees to work remotely. This could become the biggest remote working experiment ever seen in India. Occupancy in flexible workspaces is expected to stay muted in March, especially in Delhi‐NCR, as several start‐ups encourage employees to work from home.
Here is the complete Colliers report COVID-19: Impact on India Real Estate.
Novel coronavirus has been showing ripple effects on residential real estate segment as well on both national and global level. Here is how the COVID-19 is affecting the residential segment.