India Market Monitor Q3 2023

The Indian economy has maintained its growth momentum in the first nine months of 2023 primarily due to sustained domestic consumption and a diversified exports basket despite global headwinds. However, inflation could potentially keep key policy rates elevated longer than previously forecasted.

With this backdrop, here is a review of key trends witnessed in the real estate sector in 9M 2023:

• Office: Notwithstanding prevailing macroeconomic challenges, o­ffice market showed resilience in 9M 2023 witnessing growth in leasing activity on a quarterly and yearly basis; the sector is poised for a better-than-expected 2023 on the back of steady occupier confidence.
  
  
• Industrial & Logistics: Despite marginal tapering in leasing activity on a quarterly basis, quality supply addition and strong festive demand are likely to drive overall I&L absorption to expectations-beating 36 – 38 million sq. ft. in 2023.
  
  
• Retail: Robust growth witnessed in leasing and supply addition in Q3 2023 in the sector; the overall space take-up is likely to strengthen further on the back of incoming supply and the ongoing festive season.
  
  
• Residential: While residential sales exceeded 230,000 units in 9M 2023 registering 5% Y-o-Y growth, sustained momentum in demand led developers to launch over 220,000 new housing units during the same period at a marginal growth of 1%. Both sales and new launches could reach a decadal high in 2023, touching or even exceeding the 300,000-unit mark.
  
  
•  Investments: Investment activity regained momentum, witnessing an increasing trend in Q3 2023. Land activity remained strong while opportunistic and core / core plus bets dominated the capital flows.

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