BENGALURU: Warehousing and affordable housing will continue to drive investments into the real estate sector over 2021, followed by other capital-heavy sectors such as data centres and commercial office units, according to a report by global property consultancy firm Savills India.
The firm added that private equity investments in warehousing and the industrial verticals are expected to touch $330 million the next year and overall warehousing activity is expected to increase by 60 per cent during the period. Investments in this niche segment are estimated to rise by 17 per cent.
“For the investor community and private equity players, the warehousing segment is becoming an asset class of choice in times ahead. While the leasing activity in the industrial and warehousing segment has declined year-on-year, we expect rentals to see a steady rise as quality supply gets added to the stock. The world of private equity would be aiming for some of their most lucrative opportunities in the time to come,” Diwakar Rana, managing director, Capital Markets, Savills India said in a statement.
The likely repairing of the bruised economy, improving trade relations, policy support, and progress on the vaccination front are the key factors that would drive investment sentiment in the space going forward, with growth in sectors like manufacturing, logistics , e-commerce as well as overall infrastructure, translating into higher demand for investments.
The real estate sector had been one of the worst hit in 2020. The report also noted that there has been a growing trend of increased investments in ready-office assets, flowing away from the residential segment, since 2015.
Investments into this segment has shifted further towards student housing, data centres, and warehousing bets, it pointed out. Retail investments, on the other hand, were on a downward spiral even before the pandemic, primarily due to the steadily increasing adoption of e-commerce by Indian consumers and a lack of supply of premium quality retail malls.