Significant Factors That Push Commercial Real Estate in India

Though it is difficult to be selective… because real estate forms the center of all the activities that take place in a city, some more equal of them are as follows:

Migration & Urbanization

The migration of people from rural areas to cities in search of earnings is fuelling the urbanization. This has consequentially increased the need for more shops, offices and production units under the tag of commercial real estate.

Country’s Constant Economic Growth

The nation is developing as an economic power house. The world also got a glimpse of India’s financial strength, the way India hosted the G-20 summit. By witnessing India’s willingness to prosper further, the world community is also responding positively. Many MNCs and business tycoons are opening their units, offices, and R & D setups in India. This has generated demands for more commercial spaces in the country. As per UNISPACE survey report, 91% of Indian companies have already met with this demand and started expanding their work spaces.

Policies and Initiatives taken by the Government?

In the last 8, 9 years, Indian government has implemented a number of measures to boost the commercial sector in India of which real estate is an integral part. Make in India, Startup India, Digitalization drive, Mudra and other MSME schemes have fostered a conducive atmosphere for the business development in the country.

Attractive Foreign Direct Investment (FDI)

Government initiatives and relaxed regulations have attracted many foreign direct investments into the Indian market, particularly the real estate sector. A recent example of this is the US based commercial real estate giant, Panattoni, who is investing Rs. 110 crore to develop Warehouse Park in Delhi-NCR by 2025.

Improved Technology?

Technological improvement in anything ultimately pushes the real estate sector. The improved consumer durables and FMCGs have created demand for more manufacturing units, retail outlets, and office spaces. Similarly, technically sound Transportation facilities have expanded the boundaries of cities resulting in more demand for infrastructure and realty development. The modern technology based trade practices like e-commerce, and other service oriented on-line facilities have created the need for more distribution centers and office spaces.

Rise in Flexible Co-Working & Innovative Working Space Ideas

Flexibility at a work place means allowing the employees to work as they wish. By 2026, the flex work space market in India is expected to touch 80 million sq. ft. which at present stands at 43.5 million sq. ft. The leasing segment of flex spaces is also approx. 18% of the total commercial office leasing held in 2023. The growth of co-working concept is now taking innovative shapes in the form of ‘Dedicated Co-Working Cafes’. Here, in a cost range of Rs. 100 to 1000 per day, a person enjoys a number of features like- Pleasant ambiance, Snacks cum Beverage facilities, Various Seating Options, etc. The cafes are fitted with all the required necessities like- Hot Desks, Separate Desks, Private Cabins, Conference Rooms, Wi-Fi etc.

Whatever happens anywhere, in any field creates need for commercial real estate development. Therefore mentioning only six factors listed in this blog will be an injustice with the reality of commercial real estate in India. ?

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