In 2023, analysts forecast a booming Indian commercial real estate market with investment possibilities in flex properties, retail stores, and office buildings.
India's commercial real estate industry has been continuously growing as a result of factors including innovative office space layouts, top-notch facilities, prime locations, and a welcoming environment for businesses. The market is expected to increase at a CAGR of 27.19% from its present value of $67.08 billion in 2023 to $223.25 billion in 2028, according to a Mordor Intelligence report. According to the report, the long-term potential of commercial real estate has made it an enticing investment choice.
Along with development, the industry has also seen the emergence of several new opportunities. "There are many reasons for the growth of the commercial real estate sector, including the potential for high rental returns, an increase in demand for commercial properties, and the asset class' overall stability."
He continued by saying that because to the advantageous rates, stability, and benefits of portfolio diversification, commercial real estate is preferred by those searching for profitable routes that are resistant to economic change. Office space, retail space, and flexible space properties have all been highly sought-after in this environment, he added.
Current prospects in commercial real estate
Outstanding workplaces
In Tier-1, Tier-2, and Tier-3 cities, the expansion of startups and enterprises has led to the construction and demand for remarkable office spaces. By the end of 2023, both metro and non-metro areas would consume around 60 million square feet of office space.
Businesses in quickly expanding areas including consulting, e-commerce, business process management, and information technology make up the majority of tenants and purchasers. Additionally, both domestic and foreign firms are expressing interest in the country's commercial real estate as a means of expanding their operations due to the country's great locations, first-rate facilities, and affordable purchase and leasing rates.
Commercial buildings in desirable locations
Lease agreements for retail locations have grown by around 130% year over year, according to CBRE data. Furthermore, the potential for significant profits has increased as sales have quadrupled to 1.5 million square feet in the first quarter of 2023. This shows that there are several factors contributing to the commercial real estate sector's success, including favourable sites and well-made buildings. Due to the high levels of foot traffic in these neighbourhoods, there is a considerable probability of increased customer traffic and visibility for retail businesses. These properties may be lucrative long-term investments because their prices often increase over time.
Increased demand for flexible space centres
As businesses utilise flexible spaces more frequently because of its adaptability, cost-effectiveness, and flexibility, the flexible office market in India is anticipated to expand. The share of flexible spaces in occupier portfolios in India is expected to increase from 5 to 8% before the COVID-19 outbreak in 2019 to 10 to 12% in 2023, according to Colliers' prediction. "Flex space utilisation in India reached 6.5% in the first quarter of 2023, showing sustained increase. Businesses' quick adoption of hybrid and dispersed work practises to create cost-effective modern workplaces may be credited with this expansion, he continued.
Analysts predict that between 2023 and later years, the commercial real estate sector in India would reach astounding heights. In terms of good development in commercial real estate and rents, this sector is now among the most alluring. As a consequence, in 2023 there will be a lot of new opportunities in office buildings, retail stores, and flexible space assets, and India's commercial real estate market is predicted to expand quickly. Commercial real estate will offer appealing paths for investors looking to handle the continuously shifting investment landscape because to its alluring returns, long-term advantages, portfolio diversity, and sturdiness against market volatility.
Source From:- navimumbaihouses
