Driven by the robust economic prospects of the region, the commercial real estate industry in NCR has undergone a significant shift. One of the most notable changes has been integrating office space into overall plans, which has increased the supply of office space.
With the projected growth of 10-15% by March 31st, the current financial year has seen strong performance in office leasing, even though it continues to recover from the pandemic. However, this is still far from the best figures seen two years ago. Experts predict that office leasing will increase by 28-30% in the fiscal year 2024.
Several factors, such as the region’s continued growth as industrial and entrepreneurial hubs and the need for more office space as companies look to expand their operations, have contributed towards this. As the economy is growing and more companies are looking to expand their operations, there is a significant pent-up demand for office space.
Furthermore, the end of the pandemic had accelerated the return-to-office trend, leading to an increased demand for such spaces in the region as companies are reworking their strategies to facilitate this transformation. On the other hand, the pandemic also provided a fillip to entrepreneurial trends. As a result, people are starting their own businesses more than ever before and looking for suitable office spaces for their operations.
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At the same time, the growing popularity of hybrid office spaces, such as co-working, has provided new options in the market and allowed for more flexible working arrangements catering to the needs of a diverse range of businesses.
The government of India as well as the respective state governments are also on an infrastructural improvement spree. It is turning the region into an investment hub for multinational companies. Both these factors have also contributed tremendously in boosting office spaces in NCR. The continued strength of the Indian economy and ample supply will also contribute to this growth.
Furthermore, real estate developers are also focusing on building sustainable and eco-friendly buildings to meet the growing demand for green buildings. While improving the environmental footprint of the structure, it is also attracting businesses looking for sustainable office spaces.
Despite this increased demand for office spaces, the region’s current level of office leasing has yet to reach the numbers of around 42 million square feet witnessed in the fiscal year ending March 2020. However, the potential for future growth is substantial, and office leasing is expected to continue to increase in the coming year. As the NCR reinforces its position as a major industrial and entrepreneurial hub along with the companies looking aggressively to expand their operations, the need for office spaces is only going to increase. Overall, the commercial real estate development, especially of the spaces in NCR, holds much potential for growth in the coming years.
(By Bharat Kumar, Director, Spaze Group)