Positive Impact on Industrial Real Estate in India Post Covid19

Impact on Industrial Real Estate in India

Positive Impact on Industrial Real Estate in India post Covid19 :In March 2020, when the nation closed down because of a global pandemic, Covid 19 (or Corona Virus), there was a holistic pessimistic atmosphere. Stocks markets crashed, people panicked and there was a lot of ambiguity about the future of India.

However, every event has a positive and negative impact. It is difficult to find any positive impact about such a global disaster, which human history has witnessed for the first time in a decade. Yet, there are few positive results from this event.

Let us study them in detail | Positive Impact on Industrial Real Estate in India post Covid19 :

The Covid 19 pandemic originated in China. Much news state that China purposely hid facts about the intensity of this virus. Hence, the world is angry with China and there is an overall negative sentiment towards the nation from the entire world. Only time will tell, whether this negative sentiment will affect commercial activity globally. If it has indeed translated, then countries like India can tap into this opportunity.

The China Advantage

Companies who are looking for opportunities outside China, can shift base to India as it is the most lucrative opportunity for them. The government of India and governments in certain Indian states (such as DELHI) offer special concession to such companies. The Narendra Modi government has offered tax concessions and attractive schemes to companies wanting to make investments in India. Adding to that, there are excess industrial plots for sale in Delhi, as the real estate industry was anyway not booming. Cheap industrial plots are available in Delhi, such as plots in Mundka and Wazirpur industrial area near Delhi.

India also has an added advantage over China because she has friendly ties with USA, which China does not have. Companies will consider this aspect while looking at options outside China. India will also try to boost its economy, by attracting such companies and offer concessions. Many countries may have more trust in India as compared to China, which makes it a better choice than China. If such industries do come to India, it will increase our employment.

The first step in such investment from foreign shores is Facebook’s USD 5.7 billion investment in Reliance Jio.

China feels threatened by the competition from India, and hence India changed its FDI policy for neighboring countries. Many countries have made a similar move like India, as they want to prevent China from acquiring companies. Whereas, China is keen on making acquisitions globally, so that it becomes a world super power.

Investment Opportunity

This event has given a once in a life time opportunity for investors (with capital availability), to make long term investments in real estate, stocks and other investments. As the entire country remained closed for a month, the economy has declined to a great extent. Industrial development and growth came to a halt. Recovery to previous levels might take a while.

During this time, factories and production units, which had facilities, hosted their labourers and employees. They paid for their living expenses, food and shelter.

Employers had an opportunity to showcase their kind attitude and compassionate side.

Mumbai businessman and MD of Sunteck Realty told media that his company offered food and shelter to about 2000 workers and appealed to them not to travel. This is a perfect illustration of positive impact of Covid 19 on industrial real estate. Company owners are abiding by their moral duty and social responsibility towards their employees. Corporate stakeholders are showcasing their humanitarian side.

Another example of philanthropy by a businessman is Amit Sarin (CEO of Anant Raj Ltd.). He owns three construction sites in and around Delhi. His workers are being hosted along with food twice a day and medical aid from authorities. Thus, Amit got an opportunity to serve the society due to Covid 19 pandemic.  Citizens with high net worth supported poor and needy people.

As land prices are expected to go down, investors can invest in industrial plots and real estate for manufacturing (especially in industrial areas near Delhi). Government has announced special housing schemes for its citizens. Indian Finance minister, Nirmala Sitaraman made an announcement to offer special financial assistance through schemes in order to boost the growth of housing projects.

Chances are that the government may issue more positive policies supporting the industrial growth in Delhi and all over India.

A positive impact of Covid 19 on industrial real estate is that the government has shown its concern towards the society and industries. This move is with keeping in mind the sentiments of the needy section and daily wage workers of the society.

Real estate prices will see a sharp decline at least in coming months (maybe even years). Plots in Delhi and surrounding areas will be cheaper. Hence, investors interested in industrial real estate investments (especially near Delhi and NCR) can tap into this opportunity. They will probably not get such a profit on investment in real estate anytime in the future. The present profit is almost 30%. Analysts feel that the government will save the real estate sector for declining by pumping in capital and announcing relief schemes. Some of these measures are already under process. This is one of the biggest boosts to the real estate sector, which is a huge positive effect of Covid 19.

The Delhi government has framed policies to protect the environment from pollution. Therefore, they have a plan to seal more than 9000 factories in a certain area near Delhi. Hence, these need to move to other areas. This is a perfect opportunity for them to purchase industrial plots in areas near Delhi (where permissible). This will benefit the real estate market in Delhi.  Plots for sale with loan are available in Delhi and NCR.

As the stock market does not look very promising in the near future for investments and return, investors will move towards purchasing real estate. This includes industrial and residential properties in and around Delhi, NCR area. This is a positive impact of Covid 19 on real estate in India.

Thus, below are some pointwise positive effects of Covid 19 on industrial real estate in India:

  • Government policies related to real estate.


Read more at: https://www.bloombergquint.com/coronavirus-outbreak/three-ways-to-assess-covid-19s-impact-on-indias-real-estate-sector


Read more at: https://www.bloombergquint.com/coronavirus-outbreak/three-ways-to-assess-covid-19s-impact-on-indias-real-estate-sector



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