While residential markets faced headwinds this year, Office market recorded 60 million. sq. ft. of gross leasing between January and September 2025, the highest ever for the first nine months of any year. Anshuman Magazine, Chairman & CEO of CBRE India, South-East Asia, Middle East & Africa shares his outlook for various segments and issues in the property market in an interaction with Raghavendra Kamath.
And what is your outlook for office leasing next year?
We are optimistic for next year..Beyond that we are cautiously optimistic because it’s difficult to predict . In 2024 almost 81.4 million square feet of office space was taken up . We are hoping that we’ll be higher than this by a small percentage this year, maybe 4 to 5% higher. But the good news is that in spite of a high base, we’re still growing by a few percentage points compared to previous year. But we will know the exact numbers soon and so far where we stand, the pipeline looks good for 2026.
Why do you think not many REITs are getting listed ?
I expect a couple of more REITs to come in by 2026 because the whole process takes time. First of all, to consolidate their portfolio it takes time. Then doing all the paperwork and then coming to the market takes time. But again I’m fairly sure they’ll be. REITs are here to stay . REITs have become a very important part of our real estate market and now after the success of 3-4 REITs which we have , some new ones will come .
Coming to residential, the growth has tapered off. Do you expect that it will pick up with rate cuts?
First of all, the residential market will behave according to the region and cities. I don’t think there will be a standard behaviour across India. Reason is that Mumbai , Gurgaon sales will behave very differently than Bangalore, Chennai and Hyderabad. And secondly also within markets like Mumbai, NCR and Bangalore, you would see different behaviour. For example in Mumbai, Worli it will be different than Andheri. Same in Bangalore, what Whitefield may do is different from Sarjapur Road, Ring Rd, and so on . in NCR, Gurgaon, Noida, Ghaziabad will behave differently. But interest reduction is definitely positive for the residential segment.
In warehousing. on one hand, the land prices are continuously going up , on the other rents are not growling slowly.. Is it a matter of concern?
No doubt that there is a challenge right now with land prices going up, it makes it that much more expensive to deliver warehousing at the current rentals. What the occupiers want and what you want to deliver. The rentals are not going up in the proportion of what the land costs are going up, but the market has its own dynamics where the demand for logistics is still there. And at the end of the day, I believe logistics will still continue to expand and on the supply side you would have to meet that demand and it only means that you’ll have to go further ahead where the land is cheaper.
How is data centres driving the demand for commercial properties?
See, unlike warehousing where within 9 to 12 months you can put up a warehouse, data centres take time. First of all, it’s capital intensive. Its technology and construction are expensive, and the requirement of power is very high. The requirement of water is high and just getting everything done takes time. But data centres are here to stay and stay for a long time, but unlike in residential or even logistics, where there’ll be 10 million square feet or 15 or 20 million square feet come in a year, that’s not going to happen in data centres. Every year you will see new data centres coming, but it will be at a slower pace.