In the last few years, the commercial real estate sector in NCR has witnessed enormous growth. But unlike anything in the past when big malls were in demand, the post-pandemic period brought with it its nuances and led to an increase in the popularity of SCOs or shopping-cum-office spaces, a hybrid model in which offices and retail spaces, along with recreational facilities and food zones, are integrated into a single structure.

A major reason for this is the existing convenience faced by shoppers. As SCOs started gaining traction, the segment picked and developers announced an increase in new launches. In the last two years, a massive 71.6 acres of land has been under SCO development in Gurugram, which is expanding at the rate of 30 to 40% annually.

Recent data compiled by Boston Consulting Group (BCG) and the Retailers Association of India (RAI) for India’s retail industry is also encouraging. Not only is the retail segment going to expand significantly, but its value is slated to double, reaching $2 trillion in the next ten years. Another study conducted last year forecasted the retail sector’s value to reach between $1.1 and $1.3 trillion by 2025, showcasing an impressive Compound Annual Growth Rate (CAGR) of 9-11%, marking a substantial increase from its $0.7 trillion valuation in 2019-20.

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All this data points towards a massive boost in the SCO sector. Further, the massive growth being recorded in the country and the infrastructural thrusts in NCR will lead to an economic boom, which in turn will propel the growth of new businesses, leading to an increase in demand for new office spaces. This development is set to boost SCO growth. NRIs and global businesses have greatly invested in the office segment resulting in SCOs becoming an emerging asset investment class amongst investors and buyers looking for high capital gains.

Low Entry Cost – High Return on Investment

One of the major advantages of SCO for the developer and the buyer is its relatively low cost of entry. With low ticket size, it marks a higher capital appreciation and is easy to lease or rent. Besides, it is also suitable for a wide variety of uses such as walk-in retail stores, hospitals, businesses, etc.

For shop owners looking for low-investment options, SCO makes for a profitable option for running their respective businesses. Besides, it also serves primarily utilitarian functions. SCOs typically comprise retail units, high street stores, hypermarkets, offices, coworking spaces, restaurants & cafes, banks, ATMs, healthcare centres, and fitness centres. These are the kinds of places that offer higher mobility as it has parking advantages and closer vicinity than typical shopping mall structures.

Gurugram’s Booming SCO Market

Gurugram’s commercial real estate market is booming. With numerous businesses looking to establish themselves in prime locations and a large residential development along with thrust to businesses, SCOs in the city offer unique opportunities for businesses to grow and thrive. The prime locations for SCO development in the city include Dwarka Expressway, New Gurugram, Southern Peripheral Road, Golf Course Extension Road, and sectors 36 & 37D. Gurugram’s Sector 90 and 95, located near Sohna Road, are also witnessing an increasing number of new launches. SCOs in Gurugram offer easy connectivity and proximity to residential and business hubs, metro facilities, and prominent Information Technology (IT) hubs.

An emerging facet of the SCO developments in Gurugram is a conducive corporate environment and flexibility for investors in building plans and customizations. Undoubtedly, SCOs in Gurugram have emerged as a hot investment option. With a wide range of options and availability at prominent locations all around the city, they carry a big appeal for both self-use and rental purposes. Further, a high return on investment in the long term has made them increasingly desirable. The time to invest in SCOs has not seemed better suited.

(By Sandeep Chillar, Founder & Chairman of Landmark Group)

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