Experts hail BSE Realty Index's crossing 11-year high
Experts have welcomed the BSE Realty Index, a gauge for the performance of real estate stocks, which hit a 11-year high on Wednesday
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Mumbai, Sep 24 Experts have welcomed the BSE Realty Index, a gauge for the performance of real estate stocks, which hit a 11-year high on Wednesday.
They believe that it will act as a booster in the field of institutional capital investments and the performances of the various real estate asset classes.
The gauge posted its biggest single day gain in over four years as a spurt in property registrations and low home loan rates triggered hopes of demand revival for the sector.
Shares of Godrej Properties zoomed 13 per cent, DLF rose 11.6 per cent and Indiabulls Real Estate surged 8.9 per cent amid across-the-board buying in realty shares.
Indian real estate market is regaining the confidence of the global institutional investors. They see good opportunities in India across the capital stack on both the equity and debt side. Although India remains credit starved, the space left by the NBFCs is being filled by global credit funds who are becoming quite active in the country.
With the declining interest rates in India and cap rate compression, the interest rate gap between overseas and domestic market is narrowing which is opening newer avenues of investments.
The long-term view on India is one of uptrend on commercial absorption on the back of increasing pace of vaccination, which will translate into a strong H2 of FY22.
"Residential is seeing a significant revival across markets on the back of favourable government policies, pent up demand of 18 months, attractive pricing, and lowest ever mortgage costs. Investor interest in retail is also slowing coming back as spaces have reopened fully in most markets and people have restarted evaluating opportunities in that space," says Sharad Agrawal, Executive Director – Capital Markets, Knight Frank India.
Hospitality has seen a strong rebound in occupancies on the back of domestic tourist demand, but the ARRs will take some more time to recover given the limited number of foreign travellers. Warehousing and data centres are seeing strong traction on the back of both shopping and entertainment increasing moving to the digital space, he added.
