Four Popular Real Estate Sectors for Investment
October 18, 2024 in Property Guide
Backed by a solid structural foundation, lowered home loan rates, and a gain in demand, strong momentum is expected to prevail in the real estate sector shortly. This indicates that FY 23 will be the fiscal year the real estate industry has been hoping for a long time. Furthermore, the upswing in the real estate market will also stem from a commendable economic outlook. The surge in commercial activities along with a rise in job opportunities and income levels will automatically lead to an increased demand for housing societies.
Further, the market bounce back is also expected to see a gradual recovery in the coming days. Considering the softening of the market due to the global pandemic, the real estate market has seen an upswing in the second half of 2022. The multiple iterations of repo and reverse rate cuts by the government have further resulted in liquidity injection, which helped in accelerated growth.
As predicted, in FY 2023, the growth power will continue and interestingly, the real estate market in the tier-II and tier-III cities will see a rise as well. It is believed that increased connectivity, better job opportunities, and sustainable infrastructure will further fuel real estate in the small cities and towns of the country.
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Real Estate Sectors on Investors’ Radar
The four real estate sectors where the investors are expected to be hunting for deals in the upcoming future are Logistics, Multi-family, Office Leasing, and Alternatives. These real estate sectors are expected to be on most investors’ radars in 2023.
Logistics
:Over the past two years, the real estate investment momentum in the logistics sector saw a fourfold rise in the total capital deployed. It is predicted that the same will continue in the near future as well. Besides, some markets experienced a higher level of investment activity and bigger deals in the recent past. For instance, Australia emerged as a standout market with investment values rising up to 269 per cent year-on-year.
Nine out of ten participants in a recent survey reported that they will increase their investment in the upcoming year. About two-thirds of them are expected to grow their total investment by at least 10 per cent. Furthermore, some markets saw an increase in investment activity and bigger deals than last year.
Multi-family
:As per another survey, multi-family is the second-most reliable real estate sector. One in three real estate investors reported that they want to increase their multi-family AUM (assets under management) by at least 10 per cent in the future. However, the growing investment appetite for the multi-family sector was seen to be the most profitable in Japan which is believed to be becoming one of the top five living markets across the world.
Although opportunities in the multi-family sector may be more limited outside of Japan, this sector remains an attractive proposition for regional real estate investors who are seeking diversification as they are relatively low-risk and offer more stable returns than others.
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Office Leasing
:Office leasing was seen taking a backseat in the last two years due to the global pandemic. During these times, most companies switched to either a remote work mode or a hybrid work mode. However, in the near future, this real estate sector will see an increase in growth, especially from retail, tech, and IT companies. A recent survey consisting of ten investors revealed that six of them plan on increasing their office sector investments in the coming years. Furthermore, half of them are plotting to grow their portfolios by more than 10 per cent.
Interestingly, many large tech companies have already closed office lease deals. It is expected that more companies will follow their lead, with e-commerce and logistics enterprises at the forefront. These companies will pour money into warehousing. This will make them one of the fastest-growing sectors in commercial real estate.
Alternatives
:Some real estate investors said they will be targeting to invest in alternative asset classes. An excellent example of alternative asset classes is data centres. Investors have been increasing their investment in this sector considering the growing demand for data consumption. Some of the other examples of alternative asset classes include life science and cold storage facilities.
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The Future of Real Estate Technology
Owing to the new technology and an influx of capital, the real estate market is experiencing multiple changes. The increase in capital is a sign indicating that the real estate industry is preparing to undergo major changes with the introduction of new digital resources. Real estate investors are expected to increase their investment activity as well, notably in the aforementioned real estate sectors. Furthermore, it is essential that real estate investors prepare themselves for the ways in which online property listing platforms, virtual reality, and smartphone apps will impact all aspects of real estate transactions.
Real Estate Projects in India
Adani Realty is a top real estate company in India, offering a range of luxurious residential and commercial properties in India. Samsara Vilasa 2.0 in Gurgaon, The North Park in Ahmedabad, and Samsara (M Block) on Golf Course Extension Road in Gurgaon are some of the brilliantly designed projects in the country. These projects are curated with world-class infrastructure and come equipped with state-of-the-art amenities and facilities. Furthermore, these properties are strategically located and provide easy access to major hubs in the area in order to help ease the everyday commute of the residents and buyers.
Summing Up
Strong momentum is expected to prevail in the real estate market in the near future. This indicates that FY 23 will be the year for the real estate market that the industry has been hoping for a long time. To add to this, real estate investors will be increasing their investment activity in certain areas such as Logistics, Multi-family, Office Space, and Alternatives like data centres.
Adani Realty is known for its stellar delivery reputation and legacy of building some of the most luxurious structures in the country. They promise a comfortable yet luxuriant lifestyle to their residents, along with access to world-class amenities and facilities for a secure living experience. Their trust and excellence are integrated with beautiful design aesthetics and cutting-edge construction techniques to develop exemplary projects in India’s most promising cities.
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