Commercial real estate: More spaces, more adsorption
Delhi NCR [India], July 30 (ANI/NewsView): Growing interest in commercial real estate space shows no signs of slowing down. Following weak demand during the pandemic, there is renewed vigor in the segment. According to a report by Knight Frank, 25 million square feet were let between January and June this year, which translates to a 107% year-over-year increase. Bengaluru and NCR led the way, accounting for 7.7 million square feet and 4.1 million square feet of these deals, respectively.
A somewhat similar picture emerges in the rental space as well. According to the report, office rentals in Bengaluru increased by 13% year-on-year. Pune and Hyderabad saw rent increases of 8% and 3% respectively. In the NCR as well, demand is high. “High yields will continue to drive investment in India’s property sector, which includes offices, retail, multi-unit housing, etc. While residential properties at best have the potential to generate an average yield of around $2 at 3%, the commercial segment comprising office and retail/pillar space, including restaurants, can show returns in the range of 6-9%.At a time when there is a growing appetite for low risk but high return assets, commercial properties will continue to thrive and must be high on every investor’s radar,” Shubham Sardana, President of Sales, ElitePRO.
This increase in demand is not limited to office space. The retail sector has also seen a comeback. With shoppers flocking to malls and multiplexes, the retail space has left the pandemic far behind and is fully geared towards the future. There has been a surge in new construction in office as well as retail segment especially in emerging localities such as Greater Noida (West), Sohna Road and Dwarka Expressway. According to Deepak Kapoor, Director of Gulshan Homz, “After the pandemic, the real estate sector has seen phenomenal growth. Besides the residential segment, there has been a huge spike in interest in the commercial segment, both for office and retail space.There is an increase in office leasing activity and developers are coming up with new projects.Prices are still low and it is time to invest in commercial real estate.
It is estimated that 15-20% of executives will continue to work from home. Among other benefits, this will also significantly reduce rental costs. Nearly five lakh square feet of office space has reportedly been freed up over the past few months. An interesting discovery was that the new work trend emerging after the pandemic is that some of the large and medium-sized companies have been instead of renting their own offices opting for coworking spaces. An analysis of the data shows that between January and June 2022, coworking spaces accounted for 17% of all office space transactions, an increase of 7% compared to last year.
However, as Spaze Group Director Aman Sharma said, “Instead of proving to be a setback for the industry, it turned out to be a blessing in disguise as the same companies opt for smaller spaces or of coworking for their offices giving a boost to the commercial segment. It has shown flexibility to adapt to the emerging scenario and offers solutions that companies looking for offices are looking for.” “Subways are seeing a resurgence in commercial spaces across India, both for office and retail. In NCR Delhi, the trend is similar, especially in localities such as Noida, Greater Noida etc. Businesses everywhere including large retail chains are renting space Among other factors that have significantly boosted the commercial segment in these areas are advances in infrastructure, improved connectivity and increased revenue,” says Amit Jain, Mahagun Group Director.
New roads, railways, subways and rapid rail transport are being introduced. New modes of transport such as monorails, cable cars and electric corridors are being considered to improve efficiency and not only bring remote suburbs closer to cities, but also to facilitate last-mile connectivity. At the same time, increasing digitization, e-commerce and working from home have created a need for affordable and small spaces for both local businesses and retailers. As a result, commercial spaces in Tier 2 and Tier 3 cities also received a major boost.
This story is provided by NewsSee. ANI will not be responsible for the content of this article. (ANI/NewsView)
(This story has not been edited by the Devdiscourse team and is auto-generated from a syndicated feed.)