Winners and losers in India’s real estate, post-COVID-19

We examine which segments of real estate are likely to emerge as winners or losers following the COVID-19 pandemic

When it comes to the recovery of varying assets after a period of uncertainty, this recovery is seldom equal. For example, the historic highs witnessed by the stock market after the crash in March 2020 due to the COVID-19 pandemic, did not make every company’s share valuable. In real estate, too, there are certainly some clear winners and losers.

There is no denying that the usage of real estate spaces have already been witness to a major shift, post-COVID-19. Work from home (WFH) practices have become an accepted norm and the retail space has shifted to the digital domain.


Winners and losers in India’s real estate, post-COVID-19


K-shaped recovery in real estate: Who will it benefit?

The much-talked about K-shaped recovery has not only been with reference to the stronger developers growing at the cost of the weaker players but also in terms of the various segments of real estate. However, the bigger question today is – which are the segments of real estate that are winners and losers in the backdrop of the pandemic?

Aditya Kedia, MD of Transcon Developers, points out that the global crisis may have impacted most of the sectors but the country’s property market, especially the luxury homes segment, has witnessed unprecedented demand. The pandemic has turned the aspiration for a better and luxury lifestyle into a necessity. Hence, the industry has witnessed many discerning home buyers moving towards investing in luxury residential properties.

“Buyers are keen on investing  in bigger and better homes, replete with wellness and recreational amenities like e-decks, sports facilities, open areas, landscapes and gymnasiums, offering quality living. Also, work from home, which is currently the new normal, has increased the demand for larger deluxe homes that integrate workspaces. In the coming years, we anticipate the demand for luxury residential spaces to grow further,” says Kedia.

See also: Attached balconies in apartments: Necessity or luxury?


Impact of COVID-19 on residential realty and affordable housing

Aditya Kushwaha, director and CEO, Axis Ecorp, also agrees that the luxury and residential segments will emerge as gainers, once the pandemic is over. People who have been living in rental houses have started to think about owning their own space. This is driving sales in affordable housing, which has performed well in the past, as well. Apart from this, the luxury segment is booming. The luxury housing sector had shown a marginal increase in 2020, as compared to 2019.

“With the work-from-anywhere concept setting in post-pandemic, the commercial real estate segment has been hit the most. Companies that had office space on rent or lease looked at it as another expense that they could cut back on. An August 2020 report suggested that 6.3 million sq ft of office space was surrendered in Bengaluru alone and other cities in India posted similar trends. Even as the vaccination drive picks up pace, it will be a while till offices have their entire workforce under their roof and this would continue to hurt this segment for the rest of the year and even beyond,” says Kushwaha.


How will COVID-19 recalibrate preferences in commercial real estate?

Amit Modi, director of ABA Corp, is of the opinion that the WFH culture introduced during the pandemic, is here to stay forever, especially after the sustained cost benefits experienced by employers across the service industry. WFH has saved costs, in terms of leasing rentals, housekeeping and facility management costs, to name a few, for the employers. It has also increased productivity for the employees working from the comfort of their home, as they can avoid the painful peak hour transit to and from the office.

“Two major impacts may be seen in the long, as well as short term. First, with the need for more rooms or living space within an apartment, there will be a definite rise in demand for bigger apartments. This generally also means an acceptance and demand for luxury housing. An increasing number of home buyers will ask for segregated living spaces, to work and unwind under the same roof. At the same time, office spaces and co-working will see a long-winded revival curve, majorly due to existing fear factors around the pandemic,” says Modi.


Winners and losers in the post-COVID-19 world


  • Flexi-homes
  • SOHO (small office home office) homes
  • Homes with wellness features
  • Plotted developments along peripheral locations
  • Tier-2 property markets
  • Logistics
  • Healthcare real estate

See also: Will 2021 be the year of real estate in tier-2 cities?


  • Retail
  • Office spaces
  • Co-living spaces
  • Co-working spaces
  • Hospitality
  • Big, crowded cities

Mobility is likely to remain limited, in the near to medium-term outlook, with apprehensions towards the crowded places. Retail spaces will, hence, incur significant short-term losses and the market may witness a decline in retail rentals, while consumers become increasingly comfortable with online shopping and cloud kitchen concepts. There would be greater emphasis among employers, to move towards a hybrid model, whereby a major portion of the workforce will not be required to physically occupy the office space in future.

In a nutshell, in the post-COVID-19 market, irrespective of the pace of real estate growth, it will be redefined and fuelled by more need-based, built-to-suit developments. People would look for houses that are practical, feature-packed and enable them to focus on work-life balance. The market also promises to expand to new geographical locations, at the cost of the matured and saturated metro cities. Concepts like luxury and affordability will have a new definition, as homes will be evaluated on the basis of functionality and reduced cost of doing business and employees’ productivity.

(The writer is CEO, Track2Realty)


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