India Market Monitor Q1 2024

India's economy continues to grow at the fastest pace among all major economies. Inflation has come down for almost all major goods and services except for food items. Private consumption is expected to pick up as inflation eases in the coming months. Further decline in the Consumer Price Index (CPI) would strengthen the Reserve Bank of India’s (RBI) confidence to initiate a measured easing of key policy rates and reserve ratios. The government's fiscal consolidation roadmap, coupled with the central bank's cautious monetary policy, has established a strong footing for continued economic expansion.

 

With this backdrop, here is a review of the key trends witnessed in the real estate sector in Q1 2024:

 

-        Office: India's o­ffice leasing activity exhibited stability in the review quarter, mirroring trends observed at the outset of preceding years. The space take-up was led by occupiers’ expansionary initiatives across cities.

 

-        Industrial & Logistics (I&L): The I&L sector witnessed an uptick in leasing activity on a quarterly basis in Q1 2024. Despite limited completions during the quarter, supply addition is expected to pick up pace as several prominent projects backed by institutional funds are lined up for completion in the upcoming quarters.

 

-        Retail: Leasing activity witnessed a slowdown due to supply constraints during Q1 2024. However, space take-up is expected to strengthen in the coming quarters on the back of new quality supply addition and a healthy mix of primary and secondary leasing.

 

-        Residential: Tailwinds from the preceding year continued buoyant residential sales as around 85,000 units were sold in Q1 2024, registering an 8% Y-o-Y rise. The supply of new housing units remained robust as well, with developers launching approximately 80,000 units during the quarter, at a marginal decline of about 2% Y-o-Y.

 

-        Investments: Investment activity witnessed an uptick in Q1 2024; sustained capital inflows are expected during the year from both traditional real estate segments and emerging sectors. However, caution still prevails amongst investors which may lead to some lag in deal closures.

 

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