India’s commercial investment transaction volumes shrunk by 94%

Economy


India’s commercial investment transaction volumes shrunk by 94% in the first five months of 2020, the worst among the Asia-Pacific countries (APAC), according to an analysis by international property consultant Knight Frank.

The report said, the commercial investment transaction volumes, which include investment of big funds and HNIs in commercial properties in APAC reduced by 52% year-on-year to USD 44.1 billion.

India, Singapore and Hong Kong recorded a 94%, 88% and 83% year-on-year decline.

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Similarly, China witnessed a 34 per cent year-on-year decline in transaction volumes.

The report also shows that commercial deals were postponed in Mumbai, Delhi, Bangalore, Jakarta, Singapore and Tokyo.

“As more companies and occupiers look to release capital, they can direct investments back into their core businesses. We expect to see more sale and leaseback opportunities come to the market,” said Neil Brookes, head of capital markets, Asia Pacific of Knight Frank.

The report titled ‘Recovery from COVID-19’ points out that real estate activity is picking up in Asia-Pacific as key markets exit lockdown.

Markets that returned to ‘relative normality’ earliest are witnessing the most activity, with Mainland China, South Korea, Taiwan, and New Zealand leading the way.

According to a sentiment survey by Knight Frank of brokers and researchers in 18 APAC markets, the industrial sector remains the most resilient.

“All segments of real estate are impacted. Though at different paces for different segments, the sector will recover in tandem with the economic revival of the country,” said Shishir Baijal, Chairman and Managing Director, Knight Frank India.

For corporate occupiers, large-scale expansion and relocations remain on hold.

“Despite current circumstances, there is ample capital seeking medium to long-term real estate investment opportunities in Asia Pacific, particularly in core, safe-haven markets like Australia and Singapore. Accommodative monetary policies will ensure that the best-located assets with more robust tenant profiles will continue to be in demand,” added Brookes.

The report says that leasing activity fell in half of the 18 markets tracked in May while asking rents remain relatively stable across the Asia-Pacific region.

According to the report, industrial leasing activity has picked up significantly across the region.



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