BENGALURU: With the demand for office space increasing, the average commercial real estate supply in top Indian cities is expected to be at 40-45 million sq ft per year until 2020, says a new report.
The report, ‘Commercial Office Real Estate: Positive Disruptions- Beacons of Change’, was released here on Thursday by Cushman & Wakefield. It states that the next two years are likely to witness an increase in investments into the office sector as new investment grade projects come into supply.
Co-working spaces continue to gain pace with foreign entrants eyeing a pie of the market potential. While Bengaluru, Delhi-NCR and Mumbai see the highest concentration of co-working spaces, Hyderabad, Chennai and Pune, too, are growing, the report noted.
Divestments by large developed firms will also aid inflows into commercial office assets. It is expected that the inflows will see a four-fold rise to Rs 240 billion. Further, the commercial office realty is expected to see greater participation of foreign institutional investors as they continue to pick up leased and under-construction assets in India.
Speaking at the launch, Anshul Jain, managing director – India at Cushman & Wakefield, said, “While there will be certain short-term headwinds emanating from global policies, India is relatively well-insulated. India is firmly on track to become an economic powerhouse with strengthening GDP, better business environment and investor-friendly policies by the government.”
The report was released at the RICS Conference 2017 held in the city.
Sachin Sandhir, global MD (emerging business) at RICS, said, “The biggest change in the sector will be brought about by its institutionalisation. As institutional investors gain ownership in commercial office assets, better corporate governance and best professional practices are slowly being adopted by the commercial real estate sector.”
Transforming cities
While Bengaluru, Delhi-NCR and Mumbai see the highest concentration of co-working spaces, Hyderabad, Chennai and Pune, too, are growing.