The high inflation rate has resulted in a 10%-12% increase in building costs, affecting developers’ expected cashflows and project completions.
Emerging Real Estate Investment Trends in 2022
It is clear from recent times that investing in real estate would reap benefits as it has got the potential to sustain and sail through the storm of diminishing markets. This makes it qualified as the best investment option in the prevailing market conditions.
The investors are dubious about the investment opportunities that work best for them due to the changing markets and trends that confuse the investors often. So, here we present you with the investment trends of 2022 with an extensive analysis of the performance of the assets.
Real Estate Investment Trends 2022
Coliving is the most trending sector of the Real Estate sector and is about to hit 12 billion USD this year. Co-living is a millennial concept of community living with modern amenities, regular communal events, and hassle-free living. The failure of traditional student housing in providing basic amenities such as proper ventilation, privacy, and spacious rooms, has paved a way for the development of Co-Living. More than 70% of the millions prefer Co-living, this number is to increase further in leaps and bounds and is expected to alter the landscape of the Indian Real Estate sector.
Co-working spaces are shared working palaces where different people from different working backgrounds share space under one roof. 2020 is to witness increased demand for shared spaces that may be Co-working or Co-living. Co-working spaces are booming business modules that are offering affordable office spaces to freelancers, small teams, and start up’s. Co-working spaces offer everything that one requires to work efficiently from shared desks, wifi, comfy chairs, and refreshing coffee to dedicated desks, huge conference rooms, and private office spaces.
Varying on the privacy and comfort of these amenities their costs vary too. Co-working places are very flexible and allow individuals to rent out exactly what they need only, may it a shared desk or a private office, the user gets to pay only for what he uses. Currently, the Co-working spaces which occupy 10% of the office space in India are expected to reach 25% shortly significantly impacting the Real Estate sector.
With its first REIT launch by the embassy group recently, the Indian government has been promoting investments in REITs rigorously. 2021 is going to see some other REITs budding in the Real Estate sector. The holding period for a unit of REIT to be long-term is to be brought down from 36 to 12 months by the government for giving a further boost to the sector. The union budget of 2020 is also expected to declare some major reforms, suitable taxations, etc to further encourage investing in REIT’S. With RERA in the form of credible deals, Real Estate is going to be seen in action. RERA is going to be in action full-fledged, with a solid structure and stricter rules in 2021.
The fractional ownership module of Real Estate allows several people to share the costs of a property and thus own a certain fraction of the property. It is quite similar to Reit’s module but differs majorly in the transactional procedure. Fractional ownership is backed by a secure blockchain module that allows investors to experience a digitally secure transactional procedure. The fractional ownership concept is trending in many metropolitan cities, with multiple startups’ promoting the concept. This module of Real Estate is increasing at a faster pace owing to its affordability and security, which will increase further in 2021.
Assetmonk is an investor-friendly investment platform that is enabling easy investing in the best Real Estate properties through a fractional ownership module.
Residential Real Estate
The earlier trend of doing away with residential investments by preferring rental homes is waning away. The pandemic has brought a shift in the way the young generation considered investing in a home for self-consumption.
With the emphasis on health, hygiene, and social distancing, the preference of the investors is altering towards the properties located in the suburbs, away from the bustle of the cities but closer to the work station.
These trends are coupled with the decade’s low-interest rates and discounts to clear the premium stocks and stimulate sales. If you are planning to purchase a dream home, rush right away to grab one as it is the best time. You earn a steady passive income flowing directly into your account.
The covid vaccine has been creating the buzz for quite some time now, in fact, the buzz is as old as COVID itself! Initially, the news buzzed during the developing stages of the vaccine, followed by the trials and the recent vaccine drive. Now that the inoculation has started and the pharma industry is bustling with manufacturing and distributing activities, warehouses form an integral and essential part of the business.
Not only does the pharma industry needs these warehouses, the e-commerce industry which adopted a fast and instant delivery strategy to boost its pandemic-affected sales is longing for the storage space. Pharma and e-commerce are the industries that are bolstering the prominent demand.
Approximately 50 million sq. ft. is anticipated to add up to the warehouse supply of which 45 million sq. ft. is foreseen to be absorbed in 2021. This demand is forecasted to be experienced in tier 2 and metro cities across the country.
It is indeed a great opportunity if you have been waiting with good capital in hand to invest in a high-grade property like warehouses. If you are wondering to find asset class investments with small budget points, then here is the good news for you! You can invest in warehousing properties through fractional ownership. Through various digital investing platforms, you can acquire a share of the property and earn lucrative returns from the high-performing assets in the market.
The pandemic has forced us to connect and continue the operations digitally rather than physically. The need for data centers emerged as the data has to be stored digitally and safely. As many as fourteen data centers sprang up providing opportunities for investors in the year 2020. This makes it evident for the real estate industry that the demand for data centers is not to be done away with anytime soon.
According to the leading global real estate consultancy JLL, the data center industry is anticipated to add 703 MW capacity in the next four years i.e., by the end of 2025. The financial capital of India, Mumbai is expected to encounter the highest demand owing to its well-built infrastructure of data centers. Followed by it are Chennai and Hyderabad which might add up to the data centers space in the country.
The latest ANAROCK report estimates that at least twenty-eight data centers may arise in the next three years which brings in mighty opportunities for the investors.
Though the data centers are institutional-grade properties, the fractional ownership concept has ruled out the budget-based classification of the properties. You can own a share of the data center through fractional ownership. With an investment as low as Rs.5 – 10 Lakhs, you can now bag a part of a high-grade asset and build your portfolio equivalent to High-Networth Individual.
Luxury Real Estate
Luxury housing in India has witnessed a positive trend during the pandemic and stood against the storm of falling trends due to the pandemic. The concrete reasons for this anomalous behavior are the influx of NRI investments to India owing to the fall in the Indian currency and the preference of the domestic investors to capture the larger ready-to-move-in homes. The larger space requirements to support the work-from-home culture coupled with the best amenities requirements spurred the demand for these properties.
This trend is expected to drag on for the coming years for the properties in the price range of 5 Crore and above as the High Net Worth Individuals are eyeing these assets as they find these assets stable, service-rich, and managed assets. A 40% growth in revenue is expected in the year 2021. The demand is expected to grow further during 2021 in IT-backed cities like Bengaluru, Hyderabad, and Chennai.
It is hence the perfect time to invest in these assets which generate lucrative returns through substantial capital appreciation over some time. The rental returns from these properties are attractive as these are Grade A assets. You can invest through fractional ownership and earn profitable returns with a small investment.
Knowing trends will allow you to make the best investment decision and make the most from the investment. It is wise to study the trends and get to know the investment options in the current scenario as the industries are changing with the preferences and needs of the investors.
The investments like residential, warehouses, and data centers are extending the investment options for investors with all ticket sizes. This sizable expansion observed in the real estate market makes it prospective.
If you want to try your hands on investing, you can do it with just a click. Assetmonk is an online real estate investing platform that presents you with the best deals on properties. Our growth plus product enables the investor’s fractional ownership in some of the buzzing sectors like Co-living in major cities of India. The highly curated assets are listed on our platform which have an expected IRR of up to 21%. Check out the investment opportunities that range from residential to condos!
Real Estate Investment Trends 2022: FAQ'S
The real estate investments like residential, luxury real estate, warehouses, and data centers are expected to witness a rise in demand owing to the market conditions like vaccine manufacturing, e-commerce.
Investment options like residential real estate, REITs are prospective for domestic investors. While the luxury and commercial real estate might prove to be fruitful to the NRIs who may experience higher profit margins owing to the fall in the Indian currency.
Yes. The real estate sector has sustained fairly well during the tough times for the past five years starting from demonetization, followed by GST and RERA, and the recent pandemic. This exhibits the capability of the industry to go further and beyond and earn good returns once the market stabilizes which is not so far.