How will the office sector fare?
All eyes are on global capability centres (GCCs), which emerged as the highest contributor in office space leasing in 2024. GCCs, along with tech companies and flexible workspace operators, will drive the sector this year as well. New firms entering India and Indian corporates would also contribute to the market. Gross leasing of commercial office space touched a historic high of 79 million sq ft last year, as per property advisory CBRE India. However, supply of Grade A office space is low in key micro-markets in Mumbai and in Bengaluru. For leasing momentum to continue, a fresh supply of good quality office space needs to come in.
Can the housing market recover?
Following the marginal dip in home sales and project launches last year, 2025 could mark a transition after the post-pandemic high. With launches slowing down and pent-up demand used up in recent years, there could be a gradual declining trend in sales going forward, as per Liases Foras Research. Price appreciation has led to some cities becoming a bit overheated, which could dissuade investors and homebuyers. The euphoria over luxury housing projects may also wane, and the markets could correct and become realistic, thereby moving back to affordable and mid-income housing projects.
Also read: Realty wants sops, affordable housing push
How will the top developers perform?
On the residential front, the four listed developers, DLF, Prestige Group, Macrotech Developers, and Godrej Properties, will continue to grow both in sales and launches. Their collective target to clock ₹88,000 crore of sales in 2024-25, will be prompted by their financial capabilities and aggressive expansion plans, according to analysts.
Will the retail sector pick up?
Shopping malls saw healthy leasing last year due to good demand from retailers, despite minimal new supply. The retail mall landscape has also seen a churn, with a shift towards premium offerings. Leasing is expected to be higher in 2025 on account of a large supply pipeline and demand from foreign and domestic retailers. Around 9.7 million sq ft of new retail supply, across 26 Grade A shopping malls, could get operational this year, according to JLL India, led by Delhi-NCR (35%).
Can the funding momentum continue?
Institutional funding in real estate hit a record in 2024, surpassing the 2007 peak by 6%, and underscoring the return of investors. Investments worth $8.9 billion were made last year, marking a 51% year-on-year increase, led by the residential sector, as per JLL India. While it may be tough to overtake the 2024 peak, it is expected that the funding momentum will continue this year, with participation from both foreign and domestic investors. Funds pledged in 2024 could come in the next 3-5 years.
Also read: Mint Primer | Urban slowdown: Will home prices come down, too?
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