Ready to invest in commercial real estate? Explore top opportunities here

The commercial real estate market in India has been steadily expanding, fueled by new office space concepts, first-rate amenities, ideal locations, and a business-friendly atmosphere, among others. According to a Mordor Intelligence analysis, the market is currently worth $67.08 billion in 2023, with an expectation of reaching $223.25 billion in 2028, increasing at a CAGR of 27.19 per cent. The research shows that commercial real estate has become an appealing investment opportunity due to its long-term potential.

Apart from expansion, various new prospects have also emerged in the market. "There are numerous reasons for the expansion of the commercial real estate sector, including the opportunity for high rental returns, an increase in demand for commercial properties, and the asset class's overall stability," Pranndeep Singh, Director, White Flower Developers told Republic.

He added that those who are looking for economic fluctuation-resistent profitable avenues prefer commercial real estate, due to the favourable yields, stability, as well as portfolio diversification advantages. "Office spaces, commercial stores, and flex space properties have been in great demand in this setting," he said.

Latest commercial real estate opportunities

Outstanding office spaces

The growth of startups and businesses in Tier-1, Tier-2, and Tier-3 cities has resulted in the creation and demand for extraordinary office spaces. According to a Colliers and Qdesq estimate, approximately 60 million sq ft of office space will be used in both metro and non-metro areas by the end of 2023.

The bulk of renters and buyers are companies in rapidly growing industries like consultancy, e-commerce, business process management, and information technology. Furthermore, due to the country's exceptional locations, good amenities, and low purchasing and leasing prices, both domestic and international corporations are exhibiting interest in the country's commercial real estate as a way of growing their operations.
 

Investors are drawn to commercial real estate for its enticing yields, long-term benefits & portfolio diversification | Image credit: Unsplash

Commercial establishments in prime areas

According to CBRE research, lease deals for retail spaces have increased by nearly 130 per cent year over year. Furthermore, as transactions doubled to 1.5 million sq ft in the first quarter of 2023, the potential for large returns has multiplied. "This demonstrates that the commercial real estate sector is thriving for a variety of reasons, including good locations and well-designed and built establishments. Because these neighbourhoods see a lot of foot traffic, there is a good chance of consumer traffic and increased visibility for retail enterprises. These properties' values usually rise over time, making them potentially rewarding long-term investments," Singh asserted.

Investors are drawn to commercial real estate for its enticing yields, long-term benefits & portfolio diversification | Image credit: Unsplash

Increased demand for flex space centres

The Indian flexible office market is expected to grow further as businesses increasingly use flex spaces due to their adaptability, cost-effectiveness, and flexibility. Flexible spaces are becoming an increasingly important component of occupier portfolios in India, with Colliers forecasting that their proportion will climb from 5 to 8 per cent before the COVID-19 epidemic in 2019 to 10 to 12 per cent in 2023. "During the initial quarter of 2023, flex space utilisation in India stood at 6.5 per cent, displaying consistent growth. This expansion can be attributed to businesses swiftly adopting hybrid and distributed work approaches to establish cost-effective contemporary workplaces," he added.

Investors are drawn to commercial real estate for its enticing yields, long-term benefits & portfolio diversification | Image credit: Unsplash

Analysts anticipate that India's commercial real estate market will achieve remarkable heights in 2023 and the subsequent years. This market is currently amongst the most attractive in terms of witnessing positive growth in both rentals and commercial real estate. As a result, there will be many new opportunities in office spaces, retail outlets, and flex space properties in 2023, and commercial real estate in India is expected to grow at a rapid pace. As a result of its enticing yields, long-term benefits, portfolio diversification, and durability against market volatility, commercial real estate will provide alluring avenues for investors seeking to manage the constantly altering investment landscape