"India Real Estate Report 2016" Published

From: Fast Market Research, Inc.
Published: Sun Apr 03 2016

The government's reform agenda will lead to an improvement in India's business and investment environments. This includes this includes funding for key infrastructure developments and allowing greater levels of foreign direct investment (FDI). We believe that these developments will present opportunities for growth in the commercial real estate market in the long term. However, external challenges and slowing headline growth will limit the scope for sector growth in 2016.

Slowing global demand is dampening growth in the Indian economy. This is exacerbated by domestic issues including the slow progress of economic reforms, high interest rates and a struggling agricultural sector. India's real GDP growth decelerated to 7.3% y-o-y in the third quarter (ending December 2015) of the 2015/16 financial year, from 7.7% the previous quarter. However, we do expect the services and manufacturing industries to perform well in 2016, which bodes well for continued demand for office and industrial space.

Full Report Details at
- http://www.fastmr.com/prod/1132657_india_real_estate_report_2016.aspx?afid=302

Overall we see rental rates remaining stable in the office real estate industry in 2016. The steady growth of India's IT and business process outsourcing (BPO) industries, as well as the local pharmaceutical industry, has led to good demand for grade A office space, putting upward pressure on rental rates in the premium segment. Meanwhile, government reforms are conducive to small company start-ups, which could see demand rise for lower grade property in less central locations.

In the retail segment, changes in regulation of foreign direct investment (FDI) should lead to an increase in interest from foreign retailers, and thus a rise in demand for space. This offers good long-term potential for the real estate industry, but in the short term the pipeline of new supply will slow on the back of lower absorption rates. We see rental levels remaining stable in 2016, although demand will be strong for premium space.

In the industrial real estate sub-sector demand is set to be driven by India's strong manufacturing industry, as well as its rapidly growing retail, particularly e-commerce, sector. The autos industry is a major driver of demand, and is performing well. Demand for premium logistics and warehouse space is good, although there is ample space available, which is limiting the scope for rental rate rises.

The Indian economy has been resilient in the face of slowing global economic growth, boosted by rising local demand. Along with the government's structural economic reforms, this should lead to continued investment in Indian commercial real estate.

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Company: Fast Market Research, Inc.
Contact Name: Bill Thompson
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Contact Phone: 1-413-485-7001

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