Commercial Real Estate in India

The India Commercial Real Estate Market size is estimated at USD 33.62 billion. It is expected to reach USD 87.57 billion by 2028, growing at a CAGR of 21.1%.  DLF Limited, Godrej Properties, Prestige Group, Embassy Group, Wadhwa Group, K Raheja Corporation, Oberoi Realty, are the major companies operating in India Commercial Real Estate Market. Companies and employees working in a good commercial building with great facility increase functionality and productivity.  Surat Diamond Bourse is the world’s largest commercial building. Demand for commercial building increase when the economics of the country is stable and in favor to support business activities so all sectors boom.

To understand a country’s economic development, we check their foreign policy, domestic consumption, FDI etc. and for all these developments there is a support of commercial real-estate required. The Indian government has eased FDI regulations in the real estate sector, which has attracted foreign investors and developers. Foreign investment has played a significant role in the growth of commercial real estate.

After relaxation from the pandemic when the Indian economy started to recover in 2022, 25.3 million square feet of office space was transacted across eight major cities, a 107 percent increase from 12.3 million square feet in 2021 but there was still scope for more as the companies were still operating of work from home policy. Currently for the last quarter of 2023 there has been seen a decline of over 22% in the consumption due to fear of global economic uncertainty. As US leads towards recession and higher interest rates many MNCs have started controlling their expansion in foreign markets. Currently for the first quarter of 2023 New York alone has seen a drop of 43% in consumption of the commercial real estate. At the end of the first quarter of 2023, a record 1 billion square feet of office space was unoccupied in America.

Commercial Real Estate is a property that has the potential to generate profit through capital gain or rental income. Commercial building are buildings where commercial activities take place.  Commercial office space in India varies significantly in terms of location, size, amenities, and price.  India’s real estate market has been evolving rapidly, with numerous options available in major cities. Commercial real estate in India is a dynamic and evolving sector that encompasses various property types, including office spaces, retail spaces, industrial properties, and more. The commercial real estate market in India has witnessed significant growth and transformation in recent years, driven by economic development, urbanization, and the expansion of businesses. The demand for office spaces, especially in major cities like Mumbai, Delhi-NCR, Bangalore, and Hyderabad, has been robust due to the growth of the IT/ITeS sector, startups, and multinational corporations.

In terms of future growth of commercial office sector in India is set to experience a massive boom because India as a country has been witnessing a rise in investment inflows, a surge in construction activities, and an increase in the demand for commercial spaces as the government policies favors the ease of doing business in the country due to which investment inflow increases, quality of development improves and due to which more and more foreign companies feels stability and scope for growth in their respective business.

In conclusion, the future for Indian real estate market is growing at an accelerating rate, all thanks to the government’s initiatives and growing spending and consumption power of people.

Question:

What types of commercial properties are popular for investment?

Office spaces, retail properties, industrial and warehousing facilities, and co-working spaces are popular choices. The choice depends on your investment goals and risk appetite.