Investments in real estate are expected to rise by 5% to 10% in 2022. Tech companies are expected to dominate the leasing market.

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Apr 15, 2022 |
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Investments in real estate are expected to rise by 5% to 10% in 2022. Tech companies are expected to dominate the leasing market.

Investments in real estate are expected to rise by 5% to 10% in 2022. Tech companies are expected to dominate the leasing market.

A report by CBRE called the Market Outlook Report 2022 says that the conflict between Russia and Ukraine has also put pressure on the prices of building materials. The two countries together account for about 10% of the world’s steel trade.

Total investments in real estate in 2022 are expected to rise by 5-10 per cent from the $5.5 billion in 2021 to reach levels near pre-pandemic levels in 2019, according to a report by CBRE India called Market Outlook Report 2022. Gross absorption in office space is expected to reach 45-47 million sq. ft. in 2022, growing about 13-14 per cent from 2021.

Development sites/land and the office sector are expected to keep getting the most money. Still, the industrial, logistics, and residential sectors could also get more money. This is what a report from the CII’s annual conference on the real estate said. When the conference was held, its main topic was how to keep the real estate industry alive in 2022 and after.

Metros are expected to lead office, retail, and development sites investments. I&L is likely to spread to tier-II cities as well. Mumbai, Delhi-NCR, and Hyderabad were the cities that saw the most investment activity in 2021, with a combined share of almost 60% of all investments. The cities above and Bengaluru are expected to be on the minds of investors in 2022. The report said that office, development sites, and I&L assets are expected to be the main areas of interest.

With the rise of tier-II cities as the new engines of warehousing demand, investors will likely be very interested in these places. The report said that there had been a lot of growth in online shopping, steady income growth, more savings, and aspirational spending in cities like this.

The war between Russia and Ukraine had a significant effect on the world.
According to the report, building materials have become more expensive because of the conflict between Russia and Ukraine. The two countries together make up about 10% of the world’s steel trade, which has added to the costs. Russia also makes a lot of aluminium and nickel. A lot more pressure would be put on the developer community, which would raise the cost of building, even more, the report said.

There will be a lot of commercial leases in 2022.

Technology companies are expected to keep leasing office space in 2022. Still, flexible space operators, BFSI, engineering and manufacturing, and life sciences companies are expected to play a significant role in the growth of office space take-up. Similar to 2021, Bengaluru, Hyderabad, and Delhi-NCR are expected to be the cities that make most deals in 2022, a report from the CII Conclave said.

Flexible space operators are also expected to rent more space. By the end of 2022, their stock will reach 47-48 million square feet. Engineering and manufacturing companies are expected to follow the same trend because the manufacturing sector could add more than $500 billion to the global economy each year by 2030.

In addition, the Indian fintech sector is expected to grow by around $100 billion from 2021 to 25. The report said this would lead to more space being taken up by BFSI companies in the coming years.

The report also said that Hyderabad and Delhi-NCR would be the leading cities for SEZ supply. At the same time, Bengaluru would be the central city for non-SEZ supply, and Delhi-NCR and Hyderabad would be next.

2022 is going to be a good year for new home launches.

As for housing, new homes are expected to be built in places like Pune, Mumbai, Hyderabad, Delhi-NCR, and Bengaluru. While this steady flow of supplies could be insufficient for delivery times and execution abilities, it could also be good for the business. It could also make it hard for people to sell their homes, significantly as capital values rise and home loan rates are likely to increase (due to anticipated monetary tightening).

In 2021, the affordable and mid-range segments made up about 80% of all sales. This trend is likely to continue in 2022. The report said that in the “premium/luxury” market, because of the expected rise in capital values, there could be a resurgence of investor confidence and more activity by HNIs and NRIs.

During the second pandemic wave, the Indian economy took a minor hit, and so did the real estate market. Before, we were not very far along. We have come a long way. Leasing activity has been rising across all sectors and segments in the last six months, and we expect this to keep going into 2022. It’s also likely that a few new industries like I&L will grow faster than before the pandemic. “Anshuman Magazine, Chairman and CEO of CBRE, said that some of these new industries will grow faster than before the pandemic.”

“We also expect the Indian market for other types of businesses, like DCs, life sciences, and so on, to grow more. Which will allow investors to diversify their portfolios and provide more investment opportunities,” he said.

Alternative Investment Funds will become a significant source of money for real estate.

The report said that HFCs and other NBFCs are shifting their focus from corporate loans to retail loans to strengthen their balance sheets. This means that alternative investment funds will become a significant source of financing for the CRE sector in the future.

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