2024 India Market Outlook

As we embark on a new fiscal year, we at CBRE research acknowledge that despite impediments and global headwinds, the Indian real estate sector has been on a solid growth trajectory, a testament to its inherent strength and strong fundamentals. This resilience positions the sector to navigate the macroeconomic headwinds and emerge with continued strength in 2024-25.
Our annual feature, the India Market Outlook, attempts to delve into the intricacies of the current market landscape and unveil the projected course of the real estate sector in the upcoming quarters.

 

Our key projections for 2024: 

 

• Economy - India's strong economic fundamentals, characterised by a narrowing current account deficit, record foreign exchange reserves, and a sound fiscal position, present a favourable environment for real estate growth.

 

• Office - India’s office sector activity is anticipated to remain upbeat in the upcoming quarters as occupiers continue prioritising quality space for growth, potentially fuelled by a return-to-office trend. The demand pie is also diversifying as it proliferates beyond the traditional tech sector and tier-I cities while GCCs continue with their expansion spree.

 

• Industrial & Logistics - The I&L sector demand is expected to witness another strong year, building on last year’s robust performance. Occupier strategies will be key in shaping demand trends; continued preference for adopting ‘multipolar’ supply-chain strategies will mean that absorption is likely to be led by 3PL and E&M firms.

 

• Retail - The sector is poised for further growth in the coming year, with both retailers and consumers expressing cautious optimism. While tier-I cities will continue to remain the frontiers of growth, several tier-II markets will likely emerge as attractive destinations riding on the strong wave of rising consumerism, the popularity of spiritual tourism, and an expanding hospitality sector.

 

• Residential - While 2023 was an all-time peak for the sector, we expect the upcoming quarters will build upon the momentum; noticeable activity is expected across high-end and luxury categories as larger spaces with adequate support infrastructure come into greater focus. Infrastructure will likely play a pivotal role in the sector’s growth trajectory as we expect newer nodes of development around the mega infrastructure projects across key cities.

 

• Investment - We anticipate investment activity to pick pace, especially during the second half of 2024, as the global economic situation is set to improve, with significant dry powder available with investors on account of the hectic exit activity witnessed in 2023. While core sectors such as development sites, office, and I&L will continue to find favour with investors, we expect sectors such as hospitality, healthcare, and data centres, amongst others, to aid investors in diversifying their portfolio.

 

• Alternate Sectors - 
  • India's data centre (DC) market, backed by multiple government initiatives, continues to thrive on digital transformation, surging internet use, and AI adoption.
  • The rise of hybrid work models, the need for lease flexibility, and work culture shifts fuel the transformation towards flexible spaces; start-ups, SMEs, and large corporations add to the demand diversification.
  • India’s economic resilience, thriving spiritual tourism and leisure segments, and the government’s infrastructure focus are likely to keep the hospitality sector buoyant in the upcoming quarters.
  • The healthcare sector has come into sharper focus post the pandemic, driven by increasing health awareness, improved access to health insurance, and a burgeoning middle class with rising income levels, amidst increasing government spending on healthcare.
  • Life sciences firms’ office space demand is projected to rise, with build-to-suit labs and investor-occupier partnerships expectedly gaining prominence; new supply will likely maintain its growth trajectory.

 

To delve deeper into our projections, click on the download button.