Year Ender Quote | Max Estates | India Sotheby's International Realty | Trehan | Signature Global

 Mr Rishi Raj, COO, Max Estates Ltd

With several new milestones and announcements, 2022 has been an exhilarating year for Max Estates. The real estate industry as a whole has witnessed a visible shift in preference from just ‘location, location and location’ to now ‘location, product and experience’ as the three key success metrics for real estate developments.

Post the pandemic, as offices moved beyond the conventional idea of a standard brick and mortar buildings to new, modern, and sustainable ecosystems, we witnessed a trend of flight to quality with established organisations choosing Grade A+ developments as their preferred office spaces. As a Grade A+ office space player that lays great emphasis on sustainable design, energy efficient operations, and employee wellness via our unique WorkWell philosophy, Max Estates witnessed a surge in occupancy and demand. Both our operational assets Max House and Max Towers are 100% leased to established conglomerates across industries.

Carrying the same mantra forward, we have announced the expansion of our CRE footprint to Gurugram, cementing our presence in all major regions of the National Capital Region. In addition, we have won the bid for 2 land parcels of ~4 acres on the Noida-Greater Noida expressway. This, combined with our assets under development – Max Square and Max House Phase 2, will help us increase our portfolio to ~4.5mn sq. ft.

With the land acquisition completed this year, we are also geared up to launch our first residential project next year built on our core operating philosophy of LiveWell, which is rooted in ensuring the holistic well-being of residents with close attention to their physical, social, emotional, and spiritual well-being,

Max Estates is dedicated to deliver on its purpose to ‘Enhance quality of life through the spaces we create’ and become a top real estate player in Delhi NCR. Led by our wellness forward approach and differentiated experience led design, we aspire to add 1 mn sq. ft. on average, every year each in commercial as well as residential space. 

Mr. Gagan Randev, Executive Director, India Sotheby's International Realty

2022 was clearly the year that saw us rebound strongly from the backward move that Commercial real estate had taken during the Covid years. We saw this rebound coming last year but the rebound was stronger than anticipated.

·       Office leasing, which has seen the average annual gross leasing fall from the averages of 45 Mn+ sq. ft to 25 Mn sq. ft during the Covid years, strongly rebounded to 42 Mn sq. ft again in YTD CY 22. We expect CY 22 to  witness leasing demand of more than 50 Mn sq. ft. However, the shift has been more towards Grade A and Enterprise/Coworking solutions. The vacancy in Grade A offices in the top 7 cities stands at 17%  while that for Grade B  stands at over 22%. Similarly, the growth in Enterprise solution take up was strong at  9% and along with Coworking at almost 20%  of the total demand    - indicating that Occupiers wanted to have a flexible strategy towards their growth plans

·       Retail – which was most impacted during Covid ( rental renegotiations/stoppages had been most pronounced in this sector) returned with a bang. Rentals have come back and even exceeded pre-Covid levels and Retailers/Malls have been making strategic movements of tenants – brands with higher Gross Sales have been given prominent spaces and those with slower sales have been relocated. Surprisingly a lot of Global brands have chosen their India entry at this time and this has augured well for Retail. An example is Tim Hortons which has already set up close to 7 stores and have plans of expanding further. Reliance Retails is getting in a lot of new brands, which will all require space in high end Retail outlets.

·       Warehousing maintained its steady growth in 2022. The paucity of quality built warehouses, time taken for aggregation and development of new facilities all meant that only 42 Mn sq. ft of additions was made in the warehousing sector. Rental growth was at 3-9% Y-o-Y, depending on the market. 3PL and E-Commerce were the preferred tenants, going after most of the Grade A supply.  It needs to be also kept in mind that this sector actually grew during the period of Covid as E-Commerce/3PL actually had a leg up.

2023 Outlook

·       The outlook for Office remains strong in 2023. We expect a very strong rebound in Grade A spaces and the vacancy rates in these office parks should continue to reduce while Grade B spaces would find it more challenging. The Bangalore, NCR, Mumbai and Pune markets continue to look strong from a rental growth perspective. Hyderabad is the only market which might see a pricing challenge given its enormous supply coming in the next few years. Coworking and Enterprise solution office space would continue their growth trajectory as Flexi and managed spaces remain the preferred option for quite a few clients. The big commercial developers are constantly enhancing building specs and efficiency as they look to ensure that they are able to continue to demand the rentals that Grade A offices command.

·       Retail again seems to be set for its strong performance and rentals will continue to show their upward trajectory. India is expected to see 16 new malls opening in Tier 1 and 2 cities in 2023 and a similar number in 2024 and it is a clear expectation of participants that E-Commerce and Physical shopping will co-exist. In fact, post Covid the urge to go to the Malls and open format Retail spaces will continue to grow, as is amply evident now. Fully owned malls will continue to see upgrades to enhance their attractiveness and Owners are once again exploring ways to utilise any additional FSI for expansion. There will be an explosive growth of Retail in the open Shopping complex format in Tier  A city outskirts and Tier B cities.

·       Warehousing will continue its strong investment and growth momentum. The entry of new Global players like Prologis and Panattoni will make sure that all the players are exploring land and development opportunities, with even more vigour, in the 20 top cities which seem to be the preferred locations for Warehousing. The Government’s PLI scheme and the China plus One strategy is also going to see a big thrust in Manufacturing of Smart  Phones,  API related products and other specific industries. These will enhance the demand of upgraded warehouses in locations around these facilities.  Increased offtake by newer players will more than offset any slowdown that E-Commerce players might display. 2023 should also see a strong push into In City warehouses – very high build quality structures with more floors than traditional warehouses, latest technology  all achieved in buildings on plots of 3-5 acres. These would be taken up at market rentals (often just below commercial rates) and would be the new growth vista.

Saransh Trehan, Managing Director, Trehan Group

The year 2022 can be termed as one of the best years for both home buyers as well as developers. Homebuyers made a good buy thanks to stable property prices, low-interest rates, options of choosing from completed inventory and so on. At the same time developers were able to clear their inventory and debt, because of good sales.

Bigger homes, independent floors and plots were the main sought-after or preferred options of home buyers during the year 2022.

We expect that housing demand, driven majorly by end-users, will continue in the year 2023, despite setbacks in the form of increasing home loan interest rates.  

The overall industry will see a lot more confidence from the buyers and investors. Affordable housing segments, independent floors and plots will continue to attract home buyers even in 2023. However, property prices are likely to move upward because of an increase in construction cost and higher demand.

Mr. Pradeep Aggarwal, Founder & Chairman, Signature Global

Real estate, especially the residential segment, has bounced back in the last couple of years and is playing a significant role in bringing momentum to the economy.

The residential sector has witnessed good sales and launches have also shown signs of an uptick during 2022. Private equity investment has also increased significantly in the year 2022.

However, the unpleasant part during the year is significant increase in the mortgage rates. Compared to the start of the year 2022, interest rates on home loans are now more than 2% up. We believe that it may have an adverse impact on housing demand in 2023.

To sustain the demand, which is also essential to support the economy, the government should announce home buyers friendly tax sops in the upcoming budget. Respective state governments should also think of waivers in stamp duty and registration fees, as announced earlier by few states, to keep the demand movement going.