The Indian real estate market witnessed a rather slow start to Q1 2019, with the announcement of general elections, although the union budget provided some relaxation on taxable income and income from capital gains to entice housing demand from end-users.Alternate asset classes such as co-living, student housing and coworking segments witnessed growing interest from global institutional investors and domestic players. The launch of India's first REIT - an initial public offering (IPO) from Embassy-Blackstone, widely considered as marking the announcement of India's real estate sector on the global platform - was also witnessed in Q1.

"2019 will be another tough year for the Indian real estate sector given the liquidity crisis, high cost of capital and below par sales. However, the uptick in demand and supply in the affordable housing segment may provide the necessary push to the residential

segment. While residential sales are muted, the industrial and office market continues to show immense growth," says Suresh Castellino, Executive National Director, Capital Markets & Investment Services at Colliers International India.

The slowdown in NBFC funding for developers continued in Q1, resulting in a liquidity crunch and limiting the completion of existing projects and new launches. The warehousing sector continued to witness growth with increasing interest from institutional players, thanks to greater clarity on GST from the central and state governments. Grade A developers continued to develop international-standard industrial townships, including logistics and warehousing facilities, following a single-window clearance approval from the central government.

With the launch of India's first REIT in Q1, global and domestic investors continue to show an interest in income generating assets, including retail malls and warehousing/logistics parks, as well as conventional Grade A commercial office stock.
Alternate asset classes such as co-living and student housing are expected to continue to gain traction from investors and users going forward, along with other income-generating asset classes, such as retail malls and warehousing/logistics parks. With the announcement of general elections major players, including global investors, will adopt a 'wait-and-see' approach. And, depending upon the success of the Embassy-Blackstone REIT, many more REIT players could hit the Indian markets.