The COVID-19 pandemic had a sudden impact on almost all phases of people’s lives across the globe. While team Aquarock is committed to supporting our clients and customers to pass through these challenging times, we’d share how the pandemic has led to a positive impact on Industrial real estate in India. “Industrial Real Estate Sector in India Gets a Breather Amidst Lockdown”
In the real estate sector, some trends are on the rise while some have witnessed a major setback. For example, the demand for online shopping is on the rise and will continue to do so, while the current trend of densification of work and living space is under check. These trends, however, differ across various sectors and have different results on the real estate demand.
With Aquarock’s pre and post-land and industrial transaction advisory services for Industrial plots near Delhi, we ensure a seamless transition of the deal until it is closed.
Let’s take a look at how our ‘new normal’ would look like.
The activity in the real estate sector has come to a halt since more than 1 billion people went under lockdown since March 24. The real estate sector is facing a crisis in getting a hold of labour, finance, and demand.
Labour crisis –
According to the industry experts, the labour crisis won’t be a problem since migrant labourers are unable to return to their hometowns as state borders are sealed and trains are not operational. So, once the lockdown is over, labourers will be back in action. Several builders of industrial plots near Delhi have also provided shelter to their labourers who are stuck at sites.
Business operations –
Many well-funded projects might face delays. However, hit on margins may not be severe. The government would support holistic measures to save the real estate sector from the current crisis. For example, on 15th April 2020, the government announced the resumption of construction activities in non-hotspot areas. This announcement was a sign of relief for the industry as it employs around 50 million people.
The rise in demand –
As far as demand is concerned, it will soon pick up once the RBI cut lending rates by 75 basis points. The established players will set off their foot to recovery as the repayment schedule will not be in a bad shape.
The delay in deliveries won’t be significant as the demand would be unpredictable. A weaker rupee value may spike the demand among NRIs. Also, lower returns from mutual funds and stocks would encourage people to invest in real estate.
Quick highlights for the real estate sector after the resumption –
- Industrial plots near Delhi that are close to completion will be paid more attention, as the builders would want to hand these projects over, to generate cash flow.
- Government-backed projects will have a kick start.
- Raw materials would be easily available to the real estate developers since the announcement of new transportation guidelines. This will reduce the overall estimated loss faced by the industry.
- Social distancing measures will be intact even if the workers are on-site. They need to adopt hygiene measures and companies are bound to implement regular sanitisation, such as the provision of masks to the labourers, hand soaps and sanitizers.
We cannot deny that the real estate industry is a labour-intensive sector and it demands a diverse workforce. Let’s suppose, the projects which are on the verge of completion will not require more number of labourers as compared to the projects which are at a structure stage.
Also, the number of labourers required in residential projects is way more than the requirement in industrial projects as it is highly automated. Thus, though the government had restarted the activities, the developers must take the right precaution while carrying out construction activities.Industrial Real Estate Sector in India Gets a Breather Amidst Lockdown.
Industrial Real Estate Sector in India Gets a Breather Amidst Lockdown