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Time to invest in Indian Commercial Real Estate

Infrastructure
“The Indian commercial real estate market has benefited from some of the global developments like Brexit, Refugee crisis in European countries, US Presidential election and the slowing Chinese Economy. Investors from Gulf too, are heading east”

Indian Commercial Real estate, JLL India, CII, Realty Conclave 2016, Realtymyths

Sahil Zaidi

The overall Indian real estate market, particularly the Indian commercial real estate market, has started reviving. Thanks to some of the initiatives taken by the Union Government which has attracted investors across globe. In fact, India is slowly becoming one of the better markets for investment. Certain global developments too, helped India enrich its position among investors. Developments like Brexit, Refugee crisis in European countries, US Presidential election and the slowing Chinese Economy. Investors from Gulf too, are heading east.

The Indian commercial real estate, in particular, has gained tremendous momentum. Occupancy levels in various offices and retail complexes have gone up. According to JLL, an aggressive expansion strategy adopted by many companies, particularly after going through a slow phase in the immediate preceding years, along with rising prominence of newer players in the eCommerce, healthcare and technology space led to the recent jump in occupancy.

“Since 2014, there has been a positive turnaround in the proportion of Indian companies (or domestic companies) leasing space. Both in 2014 and 2015, share of leasing by domestic firms has pipped that of US companies and stands above 40%. Prior to that, the largest share of leasing was done by companies headquartered in the US. This gives credence to the fact that a proactive government that pushes growth results in a positive manner has had an impact on Indian real estate,” said Anuj Puri, Country Head, JLL India.

E-commerce has played a vital role in changing the shape of retail real estate in India, and its stellar growth rate of more than 50-51% has helped increase its share in office leasing. From being non-existent as an office tenant until 2011-12, the sector now contributes around 4.0% to overall occupancy, which is a considerable growth, the report added. The manufacturing sector, as well, has contributed significantly. Companies like Vivo Mobiles, which recently entered Indian market are setting up their units. It recently made its manufacturing unit operation in WTC’s Noida commercial property.

With GST coming into picture, the manufacturing sector is expected to get benefited the most. Putting up all the developments together on board, the Indian commercial real estate market’s future looks brighter than ever. Isn’t it the right time to invest!


The author is a real estate consultant. Views are personal.

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