Welcome to the ever-evolving landscape of India’s commercial real estate in 2023. If you’re keeping an eye on trends that are reshaping the industry, we won’t disappoint you.
Whether you’re an investor looking for opportunities, a business owner making strategic decisions, or someone curious about market dynamics, we’ve got you covered.
In this blog, we’ll break down the top five trends in Indian commercial real estate for 2023 and help you understand what they mean for you.
Let’s get started.
If there’s one common thread among the leading MAANG (Meta, Amazon, Apple, Netflix, Google) companies with bases in India and the fact that India now proudly boasts the third-largest startup ecosystem globally. The driving force of the Commercial Real Estate (CRE) industry.
While the global CRE market has faced challenges in recent years, India has defied this trend by achieving consistent growth.
The estimated size of India’s CRE market currently stands at USD 33.62 billion, poised to reach USD 87.57 billion. The growth is anticipated to continue at a remarkable CAGR of 21.1% during 2023 – 2028.
(Image Source: Mordor Intelligence)
Well, the numbers don’t lie: CRE is a compelling investment option, promising unique advantages and long-term prosperity. As it continues to grow, new opportunities are emerging in the market.
What’s also catching investors’ attention is the combination of impressive returns, reliability, and the diversification it brings to their portfolios. Notably, office spaces, commercial stores, and flex space are particularly sought-after investment choices.
In this context, let’s explore a few of the leading commercial real estate trends for 2023 that experts predict will dominate the real estate market.
One trend that’s impossible to ignore is the growth of office leasing.
Despite global economic challenges, the amount of office space leased in India went up by 12% compared to the previous quarter, reaching a total of 13.9 million square feet in the second quarter of 2023.
The cities of Bangalore, Chennai, and Pune were responsible for 59% of all office leasing activities during those three months.
Most tenants leasing these properties are mainly businesses in consulting, eCommerce, business process management, and IT.
What’s more, both local and international companies are eyeing office spaces to expand their operations. They’re drawn in by the fantastic locations, top-notch facilities, and budget-friendly prices for renting these spaces.
While businesses are increasingly in search of versatile spaces, they also want adaptable office solutions to align with their ever-changing needs.
Recognizing these evolving demands of modern workplaces, “The Address” steps forward with a commitment to delivering custom office space solutions that ensure that the flexibility and convenience companies always have a seat at the table.
With “The Address,” you get fully customized office spaces without the hassles of managing them or hefty upfront investments. We understand that your energy is better spent on your core operations, and we’ve expertly taken care of all the rest.
Our dedicated support team is available around the clock to ensure smooth operations and provide your teams with everything they need to work efficiently.
Our spaces are designed to offer versatile layouts and feature state-of-the-art facilities, all aimed at enhancing productivity and ensuring a comfortable working environment.
Indian CRE is undergoing a significant transformation, and one of the key developments leading the way is fractional ownership.
Fractional ownership enables investors to make cost-effective investments in CRE. Think of it as buying a piece of a larger property, like owning a share of a shopping mall or office building.
Fractional ownership provides:
The rise of Shop-cum-Offices (SCOs) is redefining the way businesses operate and grow, especially in Tier II cities.
It’s a prudent business model of merging retail enterprise and office spaces within a single complex. They are basically multi-story buildings with retail stores, such as restaurants, cafes, banquet halls, salons, healthcare centers, hypermarkets, and gyms on the ground floor and offices on the upper floors.
For instance, in Noida and Gurgaon, you’ll find many SCOs with stores like Croma, Vijay Sales, and Reliance Digital Hypermarket, which also use the upper floors of the building for storage or administrative purposes.
Smart building systems are becoming a big deal, with a global market value expected to reach over $500 billion by 2032.
They use smart technology to make buildings eco friendly and more efficient. Artificial Intelligence and Machine Learning help these systems predict and optimize energy usage based on factors such as weather and occupancy. Furthermore, smart systems monitor building performance and employ real-time analysis to identify potential failures.
For instance, occupancy sensors can turn off lights and adjust room temperatures when spaces are unoccupied, significantly reducing energy waste.
India is quickly catching up to this phenomenon, with many developers already harnessing the power of smart building systems for sustainability.
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Imagine a workspace that’s as flexible as your schedule, available where you need it, and with no hassles of traditional office setups. That’s the essence of flex and coworking spaces.
In H1 2022, flexible office spaces in India soared to 47 million square feet, projected to exceed 80 million square feet by 2025. They have remained highly popular among occupiers, making up 29% of the total space transactions in Q1 2023.
Moreover, in the coming year, coworking spaces are poised to expand beyond big cities, with Ranchi, Coimbatore, and Lucknow on the radar.
India’s commercial real estate in 2023 is brimming with transformative opportunities. Staying ahead of the curve is not a fringe benefit—it’s a necessity.
As we step into this promising future, let’s seize every opportunity, harness these emerging trends, and navigate our businesses toward growth, sustainability, and unparalleled success.
While you are at it, recognize that your office space is not just a location; it’s a strategic asset with the potential to drive your business forward, shape your brand, and influence your bottom line.
At The Address, we’re here to help you keep it agile and innovative so that you can watch your business thrive in the ever-evolving world of commercial real estate.
Discover The Address and embark on a transformative workspace journey with us.