Home sales, office and retail leasing are expected to cross pre-pandemic levels in 2022: Pankaj Pal

Home sales as well as the rental of office and retail space are all expected to cross pre-pandemic levels this year. In fact, in many parts of the country, demand for residential properties has already exceeded pre-Covid levels. Rental of office space in Class A buildings has also improved in major cities with the gradual reopening of offices after the second wave of the pandemic, according to Pankaj Pal, Group Executive Director, AIPL.

In an exclusive interview with Sanjeev Sinha, Mr. Pal explains how real estate is changing in the post-pandemic world and shares his business outlook. Excerpts:

In the post-pandemic world, how is the global real estate market changing?

The Indian real estate market has always been very resilient. After braving the onslaught of disruptions caused by demonetization, RERA and GST, the sector has coped well with the negative impact of the COVID-19 pandemic.

Home sales as well as office and commercial space rentals have rebounded and are all expected to cross pre-pandemic levels this year. In fact, in many parts of the country, demand for residential properties has already exceeded pre-Covid levels.

AIPL is a well-known name in the office and retail segment. How are these two segments evolving? Has mall and mall footfall returned to pre-Covid levels?

Rental of office space in Class A buildings has improved in major cities with the gradual reopening of offices after the second wave of the pandemic. Demand from the IT and BFSI sector remained strong.

In shopping centers too, rentals have improved significantly with the return to normal activity. When it comes to footfall, malls with a good mix of retail outlets, cafes, food courts, multiplexes, and gaming zones attract visitors and shoppers. Shopping malls with a modern look and feel, architecture, ample parking spaces are favorite hangouts for young people and families, crowded markets with a lack of organized shops and shopping areas. parking. Cinema is still lagging behind, but hopefully it will catch up soon.

What about rentals? Is it back to pre-Covid levels or is it still running at a reduced rate?

Most shopping center operators or commercial space owners have reduced or canceled tenancies during the Covid period to provide respite to tenants given the loss of business. In most cases, there have been no annual rent increases over the past two years. However, with business back on track, rentals are recovering, new leases are rolling out at better rates. Thus, there is no more pressure on the rentals and in the future we expect it to increase.

Do you foresee an expansion in the office or retail segment?

We already have a significant scale of high-end retail space under construction, which is expected to be completed over the next two years. That said, we are still looking to expand into commercial real estate, which attracts huge investment from both domestic and foreign funds.

Yields from leased rental assets are attractive. The introduction of the REIT has made it possible to monetize business assets.

How is the residential segment doing? Do you have an expansion plan in the residential segment?

Like commercial real estate, we have huge exposure in the housing segment. We are already developing a huge township in Punjab. We also plan to invest more than Rs 500 crore in Punjab over the next few years. The company also continues to assess opportunities in the residential segment.

Housing demand, which had fallen sharply in 2020, rebounded strongly last year. Market reports suggest that sales will cross the 2019 level this year. Companies with an impeccable track record of executing projects on time are extremely successful. Thus, sales and launches are consolidated. Owning a home has always been a priority for Indians and the COVID-19 pandemic has further fueled this need.