Certus Capital Newsletter CY23

In a nutshell

Indian real estate sector has displayed a strong performance in CY23 & is expected to continue its growth trajectory in 2024.

We are happy to share our quarterly newsletter covering the major updates on various asset classes in real estate. Some of the key takeaways are below:

Bonanza year for residential market

  • CY23 sales reached all time high surpassing the previous peak of 2010 by 25%.
  • CY23 launches was also the highest ever surpassing previous high in 2010.
  • Pan India inventory (in terms of years to sell (YTS)) further declined to 2.1 years only
  • While units priced more than INR 10MM has shown more traction, demand of units priced less than INR 10MM far outpaced their supply in CY23

Signs of green shoots in office leasing activity –

  • Though CY23 net absorption has not yet reached pre-covid levels, leasing activity quickened in 2H CY23, with net absorption reaching a historic high of c.16MM sf in Q4 CY23.
  • Overall supply in CY23 was still high with completions reaching c.19MM sf in Q4 CY23.
  • Listed players witnessed increase in leasing activity in the last 2 quarters

Accelerated growth in the hospitality segment –

  • Key events like G20, Cricket World Cup, IPL etc in FY24 have sustained accelerated growth in the Indian hotel industry.
  • Outlook for hospitality sector is positive with moderate room supply over the next few years, sustained domestic demand along with pickup in FTAs.

Real Estate Financing –

  • Significant capital vacuum in capital availability for performing, unlisted developers NBFC’s CRE exposure reduced by 44% from INR 1.5 Trn in FY19 to INR 0.8 Trn in 1H FY24
  • Aggressive land acquisition by developers – As per ANAROCK, across last 2 years (2022 and 2023), at least 179 land deals for over 5,215+ acres were closed

Click here to access the full report and get a deeper understanding of the real estate dynamics.

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