REIT effect: Real Estate services register 7.3 pct growth in Q1 2019
Real estate services in India grew 7.3 per cent in Q1 2019 after enactment of government's policy for easy access to liquidity and implementation of REIT.
On account of easing in government's policy for easy access to liquidity and implementation of the Real Estate Investment Trust (REIT), the real estate services in India have grown by 7.3 per cent in January to March 2019 quarter. Tech corporates continued to drive office space take-up in the country, with their share in total leasing rising from 22 per cent in Q1 2018 to 33 per cent in the first-quarter of 2019.
Speaking on the real estate services growth in January to March 2019 quarter Ram Chandnani, Managing Director, Advisory & Transaction Services, India, CBRE South Asia said, “Bolstered by several policy initiatives to ease out liquidity pressures and promote construction activity and the listing of India’s first Real Estate Investment Trust (REIT), the real estate services (along with financial and professional services) grew at 7.3 per cent during the review period.” Chandnani further added, “Going forward, the focus on providing ‘smarter’ space solutions, mainly by leveraging technology across all aspects of a development and a shift from just LEED certifications to delivery of International WELL Building Institute’s (IWBI) WELL Building StandardTM (WELL) certifications would redefine the office space segment.”
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Elaborating upon the reason for such growth in real estate services Rakesh Yadav, CMD, Antriksh India Group said, "Supply addition in first-quarter of 2019 rose by 23 per cent on a quarterly basis to touch 13.4 million sq. ft. Hyderabad, Bangalore, Delhi-NCR and Mumbai accounted for about 80 per cent of the quarterly supply addition. Ahmedabad, Chennai, Hyderabad and Bangalore reported a rise in development completions on a quarterly basis."
Yadav went on to add that SEZs (Special Economic Zones) continued to account for a third of the quarter’s supply, rising by almost 40 per cent as compared to first quarter of 2018. Almost the entire SEZ supply in Hyderabad, in particular, was pre-committed as developers refrained from investing in speculative development in this segment.