India Mid-Year Market Outlook 2023

India Mid-Year Market Outlook 2023: Decoding The Growth Prospects

Here we revisit our forecasts made at the beginning of the year on India’s economic and real estate growth landscape, and recalibrate our projections based on recent developments for the remaining months of the year.

- Economy: On the back of a four-quarter-high GDP growth in April – June despite global headwinds, we now expect expansion in bank credit, infrastructure spending and capital expenditure to support India’s growth during FY 2023-24.

- Office: The global economic scenario and evolving hybrid workplace models would keep corporates cautious in the short- to medium-term regarding their office expansion plans. As the green-certified stock grows across cities, we expect occupiers to increasingly lease in ESG-compliant and green-rated office spaces.

- Industrial & Logistics: Marginally surpassing the 2022 levels, an annual sectoral leasing of 36 - 38 million sq. ft. is expected in 2023. Supply addition is also expected to outperform 2022 levels and reach about 28 - 30 million sq. ft. by the end of the year.

- Retail: The growing trend of retailers making efforts to enhance their physical shopping experiences and diversifying their locations beyond investment-grade malls and marquee high streets in major cities is also expected to continue.

- Residential: Despite a lagged impact of monetary tightening, 2023 could be the year with sales crossing the 300,000 units mark by the year-end.

- Investments: Overall capital inflows into the real estate sector could dip in 2023 due to delays in decision-making and a general sentiment of caution around capital deployment.

- Alternate Sectors: Occupancy levels of data centres (DC) are expected to improve further towards the end of 2023. We could also see further expansion in flexible spaces’ stock in the second half of the year as appetite remains strong from both enterprise clients and start-ups. The life sciences (LS) sector is also anticipated to continue its growth trajectory in upcoming years.

- Hospitality: ‘Bleisure’ travel and workcations as concepts are expected to remain relevant as international business travel picks pace.

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