The Indian real estate sector has shown remarkable growth recently. Emerging as a top choice of investors, it is expected to grow to a market value of US$ 1 trillion, up from US$ 200 billion in 2021, and contribute 13% of the country’s GDP by 2030, as per a report. The investors in real estate have always believed that commercial real estate is a rewarding investment choice as it offers high ROI and additional income opportunities. With economic activities increasing and a majority of the workforce returning to office, the demand for commercial real estate is soaring high. Numbers suggest the commercial real estate market in India is expected to grow at a CAGR of approximately 13% during forecast period 2022-2027.
Digitalisation, policy support, low interest rates and growing consumer confidence have enhanced the value of this segment and new trends are constantly shaping up, which are making its future more promising.
Demand for grade-A offices, co-working offices to rise: Flexibility, comfort and convenience are the factors which are driving the demand for office spaces in the country. A majority of companies across sectors like IT, manufacturing, BFSI, startups and even boutique firms are looking for office spaces to cater to the needs of their workforce. Also, many companies are planning to set up remote or satellite offices or expand to new locations, contributing to the increase in demand for these spaces. The high-end, organised, modern office spaces today are fully loaded with all the features to provide a superior work experience while taking care of the health and wellness aspects. The decision-makers are investing in them for smooth business operations and high returns in the future.
Retail and hospitality to expand: With increase in business activities and return of customers to physical shops, the demand for retail spaces will gain momentum. The customers today want all under one roof in highly organised spaces, propelling the demand for high-end malls. These spaces come with all facilities like parking spaces, lifts, food courts, movie theatres and gaming zones, shops to cater to the needs of the families. Realising the demand, realty developers are supporting retailers with flexible leasing agreements which has resulted in a massive turnaround, benefitting all stakeholders.
Technology taking CRE to next level: The advancements in technology have taken commercial real estate to the next level. With latest technologies like artificial intelligence, virtual reality, data analytics and others, it has now become possible to provide virtual property tours, better customer relationship management, online transactions and better communication between the seller and the buyer. Technology is helping the investors and the buyers to virtually analyze property, check locations, floors, compare prices, for a background check and many others. Similarly, cloud and AI technologies are helping realty developers to streamline their operational processes, manage transactions, monitor profiles, get market updates and many other benefits.
Sustainability to be in focus: Commercial real estate is witnessing an increase in eco-friendly development due to increase in awareness and the need to tackle pollution and climate change. For a sustainable future, the focus has shifted on eco-friendly infrastructure development, use of energy efficient system, renewable sources of energy, rainwater and waste water management, greenery and better policies. Real estate developers are now giving strong emphasis on LEED, IGBC, GRIHA& BEE certifications in construction to reduce carbon footprints.
(By Harshpreet Arora, Director, Best Group)