Once having a dud period, the real estate sector in India is experiencing a sharp rise and seems to be out of the woods. Data shows that quarterly housing sales in Q1 2022 are at an all-time high since 2015 with approximately 99,550 units sold across the top 7 cities. With this rapid recovery in the sector, investors are gaining confidence, when it comes to investing in housing once again. According to one expert, the bull run in the housing market continued in the first quarter of 2022, with approximately 10% q-o-q and about 70% y-o-y growth in sales. Ever since the Russia-Ukraine war, with gold prices being pushed up to $2000 per ounce, investors were flocking to it.
With other equities falling and rising, investors have also reclaimed the gold nugget sector of real estate which has robust potential to grow. PE inflow in the real estate deal market has shown a surge with 1.7x growth on a Y-o-Y basis in 2021. However, the decline of marquee investments due to a cautious approach resulted in a fall in deal value representing a 50% decline in value in 2021 when compared to the same period last year. The investor enthusiasm and recovery in CY2022 indicates further investment in data centre construction, due to increased consumer demand and record low home loan rates in this asset class for long-term returns due to increased urbanization and demographics.
With the real estate sector paving the way for alternative asset classes and opportunities, a higher degree of accountability, reliance and transparency has been established. This has all bred an ecosystem where investors feel more comfortable parking money in real estate assets. But is there a dichotomy leading to dissimilar views of what stakeholders can expect from the real estate sector? A report by the DPIIT remarks that the real estate sector saw a foreign investment of about $52 billion between April 2020 and June 2021. While that sounds lucrative, receiving funding is still deemed to be a Herculean task and there's a public consensus that real estate may not be lucrative with returns not being great. Yet, overall, real estate is definitely part of the upper echelons of prudent investments. Add to that a couple of legislative frameworks and corporate governance like RERA being inculcated in the sector, as well as the various changes that overturn and upend, such as the COVID-19 pandemic, GST and demonetization. What does it all mean for where the realty market is and how will it cope?
All in all, is the real estate market strapped to a rocket? With the sector being at an interesting junction, what does this evolution mean for the sector? How does something that's seemingly antifragile, that was once unorganized and unstructured, become brimming with potential and promise? What's the room to innovate and grow? What is its new avatar to behold?
The VCCircle Real Estate Summit 2022 is going to bring together real forces of nature in the form of cutting-edge tech enterprises, developers, policymakers, financial corporations and more to explore what's to come and what can we expect from this new avatar of real estate.
The COVID-19 pandemic may have permanently changed the definition of 'workplace'. It may have also affected how office space can be used by enterprises and how folks are working in a virtual realm. How does the success of online collaboration for working affect people's real estate portfolios? Is the "hub-and-spoke" model of moving from a centralized headquarters to multiple spaces going to stay in a post-pandemic world? Are rising rents and evolving tax laws making decentralization more enticing? What does it all mean for asset value and urban mobility?
When the world's moving towards folks having a digital twin with virtual realities gaining more and more traction, be it learning, playing or socializing, investing in property in the Metaverse seems to be the next lucrative step for financial wellbeing. This is already being done by enterprises like HSBC and JP Morgan. How can land and real estate be purchased in the Metaverse? How can one get acquainted with Decentraland to pick up these new digital assets before it gets too big and what digital tools may be required? Is this another bubble poised to collapse? How would this affect real estate in the real world?
According to reports, private equity investment inflows into the Indian real estate sector ended up at about $3 billion from January 2021 to September 2021. For the quarter ending September, PE inflows into the property sector stood at about $480 million, which marked about 25% year-on-year growth and a 45% sequential decline. Can this investment slowdown be attributed to changes in the decision-making of investors due to COVID-19? Are marque deals to be expected as the tides turn? What does it take for real estate to cement its position as a lucrative opportunity for PE investors?
Mergers and acquisitions in real estate seemed to be severely disrupted in the course of the COVID-19 pandemic. As we move to a post-COVID world, what are the threats and opportunities presented there? What are the real estate drivers and trends reshaping the space and how have the operating fundamentals in M&As evolved? What does it take to resuscitate real estate and make it thrive, not just survive?
Real estate, as an asset class, seems to have real leverage when it comes to incorporating ESG principles. What's the social impact that can be wrung out of the sector and what kind of investments can create that narrative for sustainable investing? What long-term value can real estate assets bring and how can the tightrope with profitability be balanced? What are the kind of ESG benchmarks that can be laid out here and what is the renewed corporate governance required in this arena? How would ESG influence valuation and what kind of commitments be made here? What opportunities can real estate bring up when it comes to social impact investing? What obstacles are in the way of investors redefining orthodox investment models to acclimate to ESG investing in real estate?
Smart cities utilize connected devices and sensors for accumulating and analyzing data. How could data be used to manage resources and optimize citywide operations? How could technology be used to ameliorate infrastructure and improve public services? How could IoT actively solve problems? Blockchain has already disrupted financial services and created various applications, so how has it disrupted real estate? How it has accelerated or evolved the real estate industry? What could smart contracts mean for blockchain platforms and tokenization? How has it all changed the blockchain game?
VCC Events opens up the avenues for participation. Join hands to be a part of India’s largest gathering of alternative investments leaders, industry stakeholders and Asia’s influential limited partners, general partners and marquee advisors. Your chance to actively participate and augment yourself as thought leaders.
