Moving forward from the high-spirited closing of 2021, the year ahead is full of hopes and high expectations. The much awaited budget is anticipated to usher in, GST waivers, tax benefits and speedy infrastructure development to augment real estate. The realty sector is looking towards a sustained momentum garnered last year due to policy support and financial aid, through further beneficial reforms from the government.
NEW SHIFTS & INCLINATIONS
The learnings from the past have held the realty sector in good stead. The organizations have absorbed the disruptions and professionals have learnt to work with the changed pattern of business. Year 2022 will be see significant adoption of technology across functions, greater customer interaction, industry consolidation and increased collaboration among various stakeholders.
In terms of realty market, tier- II and III cities will provide new opportunities for expansion and growth. With growing urbanization, the metro cities peripheral areas too offer ample scope of business growth as mixed use developments and integrated residential townships are the order of the day. Housing across affordable, mid and high-end residential is seeing demand from respective customers. Joining the bandwagon are the NRIs looking at properties in India for personal use on return as well as lucrative investment.
THE SIGNIFICANT ADVANCES
One worthy development that was seen last year and will continue this year will be the demand for all real estate – residential, commercial, office and industrial & logistics. The sub segments of co-working, warehousing, data parks, second homes etc. too are seeing good traction and investments are expected to continue with fervor.
Moreover, the recovering demand has also led to the clearing of ready inventory. But, the consolidation in the sector has led to fewer project launches. Owing to the factor of limited product availability, growing input costs and inflationary pressures, experts believe that a price hike of 10-15 percent is inevitable in the housing markets across India in 2022.
Governments Pradhan Mantri Awas Yojana (PMAY) supposed to be culminating in the year 2022 will ensure this financial year will remain dedicated to government efforts towards providing affordable housing. Additionally, the notable initiatives taken last year will also see coming to fruition. The Gati Shakti master plan, the Industrial Park Rating System (IPRS) 2.0 and the development of 11 new Industrial Corridors as a part of the ongoing National Industrial Corridor Programme (NICP) will accelerate industry-led development of real estate in the coming years.
REALTY SEGMENTS ON THE MARCH
The tectonic shifts in the preferences and behavior of property buyers, end-users and investor have led to high growth expectations for some real estate segments.
Flex Spaces: With hybrid offices taking center stage, flexi-workspaces and managed offices have become an integrated part of portfolio strategy for enterprises. As per industry report, flex workspaces have come to the fore after a gap of a year, to occupy a significant share in leasing at 16-18% in 2021
Flex spaces stock in tier II cities is estimated to have grown more than two-fold in 2021 to 5.5 million sq feet. Undoubtedly, 2022 will see a complete transformation of offices into smart spaces with latest technologies and amenities.
Luxury Residential: Against the expectations luxury homes and vacation or second homes, picked up sales in 2021. With the remote work culture gathering pace, this segment will see further demand in 2022. The need for larger spaces and better lifestyle amenities is making people upgrade to premium homes and staycation to a weekend destination is driving people to invest in vacation homes.
Industrial & Logistics: Industrial segment saw investments of almost USD1 billion in 2021, led by large global investors buying ready and Greenfield warehousing projects. The investors and developers are also betting big on data centers which saw some major investments deals. As per a recent Colliers survey, industrial and logistics assets will be the most sought-after real estate assets in the APAC region, with more than 20% of investors anticipating capital value gains of 10%-20% in value-add assets in 2022.
TECH TRENDS OF 2022
Millennial have been the largest homebuyers segment in 2021. Being digital savvy they prompted the realty firms to go the digital way. Moreover, with multifunctional use of space, smart home automation, sensors and devices found their way in developer’s offerings as part of the project. The cost concerns have further turned the most reluctant of conventional developers towards advanced design & construction processes. Indeed, therise of property technology in last two years has been exponential and the digitalization of real estate is here to stay and grow in 2022.
Monotonous Chatbots are being replaced by Conversational AI that makes it easy for potential customers to get answers within no time. They can simply raise queries and smart chatbots will send out the reply instantaneously. Smart chatbots store unique queries and frequently asked questions and performs the 24/7 customer services.
Big Data and Machine Learning are enabling real estate applications to predict information with a great deal of accuracy, in spite of the immense amount of data and information available
Cloud-based software has made it much easier for stakeholders to access and analyze data from anywhere in the world. Software as a service, Platform as a service, and Infrastructure as a Service are three up-and-coming service models in PropTech for 2022 and beyond
HEADWINDS & TAILWINDS
It remains a little early to predict the implications of the new evolving variant of COVID-19, what seems highly likely is that 2022 will go on the similar pattern as the preceding year. The same trends will continue this year as well and the sector will need to remain cautious in its approach and near term plans.
The silver lining is the preparedness of the sector, the positive sentiments among the buyers & investors and the government’s determination to bring economy back on track speedily. Indian economy and real estate as its crucial part, have shown a great deal of resilience in 2021 to recover the growth pathway. Going forward, the real estate companies that will incorporate strategies to stay ahead of changes will be best positioned to reap the benefits in 2022.