India's Resilient Realty

India’s real estate sector, which had been facing rough weather for the past 2-3 years, was dealt a crippling blow by the Corona pandemic. However, despite the onslaught, the sector has shown great resilience and is on the path to recovery.

Vinod Behl
The magnitude of the hit that the real estate sector got due to a weakening economy, following the Corona induced lockdown, was evident from the depressing data in H2, 2020, especially the June quarter. According to Anarock Property Consultants, the resident segment saw sales declining by 49% in H1 2020, in comparison to H1, 2019. It was 37% lower than the previous trough of H2, 2016. The year 2020 saw a half yearly decline of 56% in new launches.

The commercial real estate (office realty supply) was expected to go up this year. However, due to the pandemic disruption, it too was severely hit. As per Knight Frank India, the office realty segment witnessed a decline of 27% to 17.3 msf in H1 20. The NCR and Pune markets, respectively, saw the sharpest fall of 86% and 87%. The office leasing dropped by 37% yoy to 17.2 msf - the lowest in a decade. Transaction activity fell 79% yoy during the Q2 period.

The retail segment was the severest hit due to closure of shopping malls for several months. Multiplexes, the major revenue driver, were shut for an even longer period, badly hitting mall revenues and the mall space supply was also badly hit.