Demand for logistics infrastructure is booming in India due to the introduction of Good and Services Tax (GST), which has revolutionised how goods are delivered across the country, according to the Emerging Trends in Real Estate Asia Pacific 2019, a real estate forecast jointly published by the Urban Land Institute (ULI) and PwC. This has also been helped by the Government of India according to the infrastructure status to warehousing projects. As per the report, Mumbai stands out with respect to demand for high-quality office space. The city is also seeing a strong growth in co-working assets. On the retail front, high-end malls continue to perform well, if properly managed. However, mid-tier facilities are often unprofitable, given that Indian consumers are migrating online. According to John Fitzgerald, CEO, ULI Asia Pacific, the report shows that despite high vacancies, the ongoing shortages of modern office stock mean new supply will be absorbed quickly. “India’s rapidly growing capital markets mean demand for high-quality offices is booming in Mumbai,” he added.
Bhairav Dalal, Partner-Real Estate Tax, PwC India believes that India continues to remain one of the most attractive investment destinations in the Asia Pacific region. “With most of the other cities near the top of the cycle in terms of rent and capital values, India still offers value creation opportunities. Core investments continue to remain the favourite with a few moving towards build-to-core. Demand for buying and holding retail assets is certainly moving northwards. Logistics and co-working play continues to evolve rapidly, although some investors have expressed differential opinion over their sustainability. Data centres and student housing are the new entrants in terms of alternatives.”
Foreseeing India to remain an important investment destination for real estate investors, Dalal said, “2019 will be an interesting year for real estate with India's first domestic REIT listing.”