Indian real estate sector, which was focused on apartments and villas since the beginning, is gradually changing its contour towards commercial options like office spaces, retail spaces, SCO plots and serviced apartments. High rate of urbanization in Tier-I and Tier-II cities, continuous infrastructural advancements and traction from institutional and NRI investors have given way to the popularity of commercial real estate in India. Gurgaon, Noida, Bangalore, Mumbai, Pune and Chennai are among the top markets for commercial property.
For those who are looking forward to invest, here is an insight on what could be the future of commercial real estate in India.
The service sector has been expanding and the most employment comes from the foreign companies that set up bases in Indian cities. MNCs are also outsourcing their back-end operations to Indian agencies which again leads to the demand for more office spaces in the country. Every year, several startups begin operations in India, thus adding to the demand for office spaces. Coming years are also going to be good for commercial investors owing to the high demand.
Over the last two years, the government has made several changes in the rules and regulations that guide the Indian real estate market. Successful implementation of Real Estate Regulatory (and Development) Authority (RERA) across several cities have brought about more trust and transparency in the operations. Common investors were averse to put a lot of money in offices or retail shops but now, with RERA approved projects, investor sentiments have improved and the trend is likely to continue in the near future.
REITs have been finally introduced in India and they will make the Indian real estate market more capable. These will help the builders in generating funds and will make commercial property investment more open for the common investors rather than just the HNIs. Moreover, the demand for real estate will be improved in the IT sector and manufacturing sector which is again bound to change things for the better.
After the trend of co-working spaces in the country, mixed-use creations have already started by some of the leading builders. Such hybrid spaces make for a flexible work environment and promote work-life balance. Growing demand for such spaces will continue to drive commercial real estate growth in 2020. Some mixed-use creations that are already underway are M3M 65th Avenue and Trump Towers.
Apart from office spaces, retail shops and spaces in malls are also garnering much attraction of the investors. Retail spaces can definitely be the hero for Indian real estate in 2020 given the high demand from PE investors. Overall, things are going to turn out great for the commercial real estate market in the coming time.