Commercial real estate and employment opportunities
Pranndeep Singh,
The commercial real estate sector in India has been steadily expanding as a result of advancements in office design, first-rate facilities, desirable locations, a friendly business atmosphere, and other factors. With a compound annual growth rate (CAGR) of 27.19%, a report by Mordor Intelligence projects that the market will be valued USD 67.08 billion in 2023 and USD 223.25 billion in 2028. The report claims that due to its distinct benefits and long-term potential, commercial real estate has grown to be a sought-after investment option. In addition to expanding, the industry has witnessed several new prospects.
Investments in commercial real estate
The commercial real estate business is expanding due to a number of factors, including the potential for high rental returns, the increase in demand for commercial properties, and the overall stability of the asset class. Investors seeking a lucrative avenue that can survive market volatility have turned their focus to commercial real estate because of its robust yields, stability, and benefits from diversity. Properties with office, retail, and flexible space have all been in great demand in this situation.
Outstanding places of employment
The growth of start-ups and businesses in Tier-1, Tier-2, and Tier-3 cities has resulted in the creation and demand for exceptional office spaces. According to a Colliers and Qdesq prediction, office space requirements in both metro and non-metro areas will total approximately 60 million sq ft by the end of 2023. Most buyers and renters are companies in rapidly growing industries including information technology, e-commerce, business process management, and consultancy. Moreover, Indian commercial real estate is attracting interest from both foreign and domestic companies looking to expand because of the country's excellent locations, first-rate amenities, and reasonably priced lease and buying costs.
Commercial structures in strategic locations
Based on a CBRE survey, leasing agreements for retail space have increased by almost 130% annually. The first quarter of 2023 saw deals treble to 1.5 million sq ft, increasing the prospect for large gains. This demonstrates how a variety of elements, including favourable locations and skillfully planned and built structures, support the prosperity of the commercial real estate sector. There's a good chance that retail companies will see an increase in consumer traffic and visibility because of the significant foot activity in these neighbourhoods. Due to the fact that these properties' values frequently rise over time, they might be profitable long-term investments.
Flex space centres highly anticipated
The Indian flexible office industry is expected to grow further as businesses increasingly embrace flex spaces for adaptation, cost-effectiveness, and flexibility. According to Colliers, the proportion of flexible spaces in Indian occupier portfolios will climb from 5-8% prior to the COVID-19 outbreak in 2019 to 10-12% in 2023. Furthermore, flex space penetration in India was 6.5% in the first quarter of 2023 and is gradually increasing, owing to occupiers' rapid adoption of hybrid and remote work practises in an effort to construct modern workspaces at a cheap cost.
After having everything into contemplation
The Indian commercial real estate business is expected to reach new heights in 2023 and beyond. This market is presently among the most appealing in terms of witnessing positive growth in both rentals and commercial real estate. As a result, there will be many new opportunities in office buildings, retail outlets, and flexible space properties in 2023, and India's commercial real estate industry is expected to rise rapidly. Because of its tempting returns, long-term benefits, portfolio diversification, and robustness against market volatility, commercial real estate will provide appealing options for intelligent investors seeking to navigate the constantly altering investment landscape.
