The Indian economy is on the rise and its growth trajectory is moving up at a rapid pace. India will become the third-largest economy in the world by estimates till the financial year 2028 according to the estimates of IMF. Seeing the growth and development trajectory levels, India will be the third-largest economy. Fueling this type of economic growth one center is at the core of this growth, i.e. commercial real estate.
This blog will delve into an exciting world of Indian commercial real estate, explore all major cities that are full of potential, and offer precious insights for all those investors who are seeking a foothold in the dynamic market of India.
Table of Contents:
- What is Commercial Real Estate?
- About Indian Commercial Real Estate Market
- Key Drivers of the Commercial Real Estate Boom
- Key Cities for Commercial Real Estate Investment in India
- Types of Commercial Real Estate Opportunities
- Factors to Consider for Commercial Real Estate Investment
- Conclusion
What is Commercial Real Estate?
Commercial real estate means properties that are used for business purposes or used for rental purposes or ownership but for generating income. This includes warehouses, hotels, shopping centers, office buildings, etc.
As the Indian economy rises and continues to diversify, the demand for high-quality real estate skyrockets, presenting different opportunities for bright investors.
About Indian Commercial Real Estate Market
The Indian commercial properties have been experiencing strong growth. According to the report published by Mordor Intelligence, the market size will expand from USD 40.71 Billion in the financial year 2024 to USD 106.05 Billion by 2029, reflecting a CAGR of 21.10%. This impressive type of growth can be attributed to several key factors.
Key Drivers of the Commercial Real Estate Boom
These are some of the key drivers for the real estate boom on the commercial side:
Economic Development
India’s rising economy has created a demand for office space for all domestic as well as multinational companies. Sectors like e-commerce, IT along pharmaceuticals have been witnessing a significant level of growth thus driving the need for modern office infrastructure.
Urbanization
Fast and rapid urbanization has paved the way for the expansion of all major cities along with the creation of fresh business districts. The urbanization trend has fueled the demand for commercial spaces across different sectors.
Foreign Investment
The liberalized policies of India through FDI have attracted a significant amount of investments in recent years. This stream of capital has been used to channel into developing high-quality commercial real estate projects that will further boost the market.
These factors have created a great environment for both Indian as well as foreign investors seeking a foothold in India’s commercial real estate.
Key Cities for Commercial Real Estate Investment in India
India has a rich array of cities providing a different landscape and offering great potential for real estate investment in commercial properties. Here we explore some of these favorable locations:
Bangalore
The major Information & Technology hub of India, Bangalore has become a hotbed for budding companies and small and big startups. This requires a lot of workforce and office space requirements in the city.
This is a great opportunity in this city to invest in commercial properties. Some of the major commercial hubs in this city are the Central Business District or CBD and Outer Ring Road (ORR).
Mumbai
Called the Financial Capital Of India, Mumbai provides well-established real estate opportunities, especially in commercial properties some of the prime properties being Bandra Kurla Complex and Nariman Point as well. But as the city expands, new commercial centers keep coming up in the outer areas of Mumbai.
Delhi NCR
The National Capital Region of Delhi is going super rapidly and the infrastructure development is going fast. Some areas that are especially developing at a rapid pace in NCR are Noida and Greater Noida.
When you think of the best property to invest in Delhi NCR. it’s the commercial properties that will provide the best ROI for your investment. And with the urbanization and development of RRTS ( Rapid Rail Transit System) that connects NCR with other nearby regions of different states, this trend will even skyrocket soon.
Also Read: Top Commercial Projects in New Delhi
Hyderabad
Another famous city on the rise was formerly the Nizams’ capital, with majestic palaces and forts. It subsequently experienced the emergence of PSU or Public Sector undertakings in the twentieth century and the surge of the IT industry in the 2000s. Real estate has also evolved in this direction.
According to research by JLL India, office leasing in Hyderabad will grow by 25% in 2023. The Hyderabad Metro is making significant infrastructural investments to improve the city’s connectivity. This helps to increase the city’s property prices in terms of commercial real estate.
Pune
Pune, which has become the modern city of Maharashtra, laid the groundwork for urban planning during the Peshwas’ rule. Fast forward to now, it is an expanding and rising hub that offers a variety of options for individuals, including professional chances and excellent real estate investment opportunities.
The city is growing as a new IT and industrial powerhouse, attracting workers. According to Anarock Property Consultants research, Pune has seen a 20% increase in IT/ITES, resulting in increased demand for these sorts of office space rentals.
Types of Commercial Real Estate Opportunities
The real estate market of India provides a vast range of investment opportunities thus providing for different risk appetites together with investment goals. Here are some types of properties to consider before you invest in any kind of commercial property:
Office Spaces
With the booming economy of India and rapid expansion of the service sector, the demand for Grade A office space is at a record high. Investment in office buildings and prime locations or upcoming business districts can provide higher and better rental yields along with capital appreciation.
Retail Spaces
The middle class is rising rapidly in India and the rising levels of disposable incomes are directly driving the growth of the retail sector. From high-street stores to shopping malls and convenience stores as well, these places are witnessing a massive demand making these properties a perfect option for investments.
Warehousing and Industries
The soaring levels of e-commerce and the “Make In India” have been fueling the demand for modern warehousing and its facilities. Investments in strategically located industrial parks and modern warehouses can provide stable returns and potential for long-term growth.
Co-Working Spaces
The rapidly growing popularity of different co-working spaces has created a surge in many co-working spaces in different areas. Investment in these shared working spaces can be a profitable option further serving the needs of young entrepreneurs and startups and further helping the growth of India.
Also Read: A Guide to Choose the Best Real Estate Company for Commercial Space
Factors to Consider for Commercial Real Estate Investment
Before jumping into this thrilling and exciting world of investment in commercial properties, do consider these important elements before making any kind of financial investment:
Location Analysis
Choosing a good location is important to make your commercial investment successful. Consider these factors like infrastructure, connectivity, business hub proximity as well as plans in terms of development in this area.
Market Research And Trends
Do deep market research to understand all your current as well as projected demands in terms of different commercial properties in your location. Stay up-to-date on different property trends to ensure that your investment goals line up with market needs.
Legal and Regulatory Considerations
Understand and familiarize yourself with the regulatory and legal framework of India in terms of real estate properties and investment in India. This includes all aspects like tenancy registration, property registration, tax regulations, and more.
Financial Planning and Budgeting
Do consider all the commercial real estate investments. Carefully consider all of your financial resources and with that develop a realistic budget and a proper plan for different expenses like maintenance, bills, and more.
Also Read: How to Invest in Commercial Real Estate Step-by-Step?
Conclusion
India is brimming with opportunities and commercial real estate is booming right now. The future of commercial property investment seems superbly bright and the recent report published by Colliers International States that the sq. ft range of all these 8 major cities mentioned above will reach 100 million sq. ft alone in office spaces by the year 2023. The “Smart City” mission by the Government of India will further expand the investment potential in commercial properties.
With Omaxe LTD, one of the top builders in India, explore the vast market of commercial properties in all major cities, invest in a grand future towards great ROI, and reach your new financial goals. Our team of market experts and professionals will help you navigate the market and provide the right property that will line up with your property goals. Together with us, turn your vision into reality.
