In another sign of a recovery in India’s real estate market, Apollo Global Management plans to provide a USD 1-billion debt funding to developers in the country this year, according to a Bloomberg report. Both housing and commercial realty markets are seeing a robust performance this year, with housing sales jumping nearly 40 per cent year-on-year and office space leasing rising 25 per cent jump in the March 2022 quarter.
Apollo Global Management Partner Nipun Sahni said the funding this year is higher compared with USD 750 million that Apollo lent to Indian developers last year. “About 70 per cent of this year’s lending will go to home builders and the rest to commercial developers,” according to the report.
The private equity company, which began lending to Indian property developers in 2017, opened its Mumbai office in 2008 and currently manages about USD 513 billion of assets globally.
The Current Residential Market Demand Scenario
According to a report by real estate consulting firm CBRE South Asia, housing sales in the March 2022 quarter jumped nearly 13 per cent quarter-on-quarter to over 70,000 units and sales rebounded significantly by about 40 per cent on a year-on-year basis.
CBRE said, “The affordable/ budget segment’s share in sales remained stable at 27 per cent in Q1 2022 vis-à-vis Q4 2021. While sales in the high-end category jumped to 23 per cent in Q1 2022 as against 16 per cent in Q4 2022, those in the mid-end segment dropped to 41 per cent in this quarter. The premium and luxury housing segments also witnessed a slight uptick in sales on a q-o-q basis.”
New unit launches jumped about 30 per cent y-o-y to cross the 60,000-unit mark in the March 2022 quarter. With shares of 43 per cent and 30 per cent, mid-end and high-end categories dominated new launches in the country, it said.
India Ratings and Research has also said that “between adapting to the pandemic’s impact, industry issues and government policies, the Indian real estate sector anticipates a robust end-user demand in FY23. The steady performance and quick revival in FY22 have likely helped the sector regain buyer’s trust.”
The Current Office Space Leasing Demand Scenario
According to a report by real estate consultancy firm Knight Frank Office, space leasing registered a 25 per cent year-on-year jump during January-March 2022 to 10.8 million square feet (msf). Bengaluru remained the foremost market with total leasing of 3.5 msf, followed by NCR with 2.3 msf.
The report said rents have stabilised or grown in sequential terms during the January-March 2022 quarter. “Even in year-on-year terms, rents have stayed stable or grown in five of the eight markets. Bengaluru saw the most growth with a YoY rise in rental values of 4 per cent in Q1 2022.”
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