High-street projects have become increasingly popular for their versatile layout, combining retail and office spaces. They offer a streamlined experience by fulfilling diverse needs, creating a traditional shopping ambiance, and yielding impressive returns for both developers and investors, says Vikas Bhasin, Chairman and Managing Director of Saya Group.
In an exclusive interview with Sanjeev Sinha, Mr Bhasin talks about the success of high-street projects in India and sheds light on the current trends shaping the NCR’s commercial real estate sector. Excerpts:
High streets are in news these days. What are the key reasons for their rise to prominence?
High-street projects have become increasingly popular for their versatile layout, combining retail and office spaces. They offer a streamlined experience by fulfilling diverse needs, creating a traditional shopping ambiance, and yielding impressive returns for both developers and investors. Their proximity to everyday essentials adds to their appeal, making them a more economically viable option compared to malls. In 2022, the surge in leasing activity marked a 114% increase from January to December 2022 compared to the previous year. This upward trend has further gathered steam this year.
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How has commercial realty fared in 2023, and what are its prospects in 2024?
2023 has been an exceptional year for commercial realty, primarily driven by the growing startup culture’s demand for modern office spaces near residential hubs. The trend of dedicated office spaces in newly-developed commercial areas has increased the overall value proposition and ROI. The India Commercial Real Estate Market size is estimated at USD 40.71 billion in 2024, and is expected to reach USD 106.05 billion by 2029, growing at a CAGR of 21.10% during the forecast period (2024-2029). It has a huge potential.
Can you please elaborate on the current trends in NCR’s commercial real estate sector?
One current trend in NCR’s commercial real estate sector is the rising demand for flexible spaces. Developers are exploring opportunities in suburban areas and satellite towns, fueled by significant infrastructure projects like Jewar Airport, FNG, and Delhi-Mumbai Expressway. Delhi/NCR witnessed a 30% y-o-y increase in the NCR retail leasing volume across malls and main streets in Q4-23, making it the the highest-ever quarterly leasing activity on main streets.
What factors contribute to the attractiveness of the commercial real estate segment for investors, particularly NRIs?
The commercial real estate segment is particularly attractive for investors, especially Non-Resident Indians (NRIs), for several reasons. This preference could stem from the stability and potentially higher returns offered by commercial properties compared to other investment options. Within the commercial segment, office spaces are the most sought-after asset, followed by student housing and schools. NRIs tend to favour these assets due to their perceived stability and long-term income potential. According to a survey by MYRE Capital, 53% of NRI investors prefer commercial real estate as their favourite investment vehicle.
Tell us about your soon-to-be-completed high-street projects, and their brand mix and your future plans.
Saya South X in Greater Noida West, with a combined leasing area of 6.75 lakh sqft, will house 818 stores. The retail area is expected to become operational in 6 to 8 months, while possession of the studio apartments is slated for completion within two years. Saya Piazza in Sector 131, Noida, offers a 2.25 lakh sq ft leasable area with 110 stores. Operations are expected to commence from December 2024. The Saya Group plans to deliver 4.25 lakh square feet of retail spaces in Greater Noida West by the end of 2024. Additionally, the development of 2.5 lakh sq. feet of studio apartments is underway and scheduled for delivery within the next two years. We also aim to achieve a remarkable development worth Rs 3,000 crore over the next three years.