Real estate has a new normal: Sustainable living

The real estate sector in India — both residential and commercial — has seen a spike in demand post the second wave of the Covid-19 pandemic. While new residential project launches recorded a 68% rise in the country’s top cities in quarter ended September, office space lease renewals have also been on rising. However, a new normal is building up in the industry as the pandemic gives rise to a new buzzword: Sustainable living.

As the trend catches on, costs will rise too. According to real estate consultancy firm JLL, prices of homes that have installed electric vehicle (EV) charging stations are expected to be 2-5% higher in newly constructed buildings and upwards of 1% in existing buildings. This as the EV industry is expected to grow at a CAGR of over 40%.

“This surge of EVs in India is due to increased demand, government incentives and considerable population moving towards a sustainable way of living which will lead to economies of scale for developers in the long run,” says A. Shankar, Head, Strategic Consulting and Valuation Advisory, India, JLL. “All new residential planned developments will have at least 5% parking lots for common charging facilities,” he says.

EV policies have been implemented in 14 states -- Andhra Pradesh, Bihar, Delhi, Gujarat, Karnataka, Kerala, Madhya Pradesh, Maharashtra, Punjab, Tamil Nadu, Telangana, Uttar Pradesh, Orissa and Uttarakhand. They are in the draft stage in Chandigarh, Haryana, Assam and Himachal Pradesh.

Elaborating on price appreciation, Shankar says the 1% premium in existing buildings is on account of challenges pertaining to high installation costs of charging units for large residential complexes/multi-storey buildings and limited power supply capacity. “Charging stations are IoT devices, so internet availability and connectivity should also be provided. In the short term, in places where there is high demand or more than 60% residents own EVs, this premium can go up to 2-5%, especially in new green residential complexes,” he says. Then there is the ‘walk to work’ concept.

“The future of work will be skewed towards the ‘walk to work’ concept with coexistence of value offices and value homes striking perfect social, economic and ecological balance,” says Niranjan Hiranandani, Vice Chairman, NAREDCO and MD, Hiranandani Group. “Covid-19 may also accelerate a trend from leasing office space in CBD (central business district) to suburbs,” says Raja Seetharaman, Co-founder, Propstack, a trend that will only accentuate the ‘walk to work’ concept. Delhi-NCR and Bengaluru have emerged as the most resilient office markets post the pandemic, according to a Propstack report.