Top trends in commercial real estate in India and NCR 2018

When it comes to the top trends in commercial real estate in India and NCR in 2018, co-working spaces and Grade A office spaces are selling like hot cakes.

2017 was all about accountability and transparency in the Indian real estate sector with pioneering policies and pro-market reforms that the market witnessed. The commercial real estate market in India showed strength even as the residential real estate battled the slowdown by the implementation of GST and RERA measures. This is because the commercial real estate in India had sustained demand from consulting industries, IT and IT-Enabled Services as well as e-commerce companies.

Since the vacancy rates declined considerably, the commercial real estate market showed growth prospects which added to the already robust consumption of commercial spaces. The transitional office space requirements were fulfilled by co-working spaces filled by freelancers, start-ups and entrepreneurs.

According to experts, the commercial real estate market in India forecast suggests that it will continue to thrive in 2018 and due to enhanced transparency and strengthened corporate governance within the sector. The India real estate report 2018 has been positive with the growing demand for Grade A office spaces, co-working spaces and enhanced participation from Foreign Institutional Investors (FIIs).

We bring you the office property market overview 2018 that continue to dominate the Indian real estate market currently and trends that are likely to sustain Indian real estate market forecast 2020.

Global capital inflows

In terms of Foreign Direct Investment (FDI) flows, according to the United Nations’ World Investment Report 2016-17, India ranks ninth among the top 10 countries. Structural changes, enhanced transparency and improved regulations have improved the real estate investment market in India and have made it a lucrative investment globally.

Capital flow and Private Equity (PE) are expected to grow more and see foreign participation in the Indian commercial real estate owing to their higher yields. As FIIs continue to take under-construction and leased assets in India, their participation in the Indian real estate market will see greater movement. FIIs have started looking for alternative assets with student housing being one such popular alternative asset.

Flexibility is the key

The biggest trend in 2018 is going to be the flexibility offered to occupiers by developers. In fact, global players in the flexible office space have started with co-working spaces and have leased office space in 2017. Renowned developers are likely to take the plunge into flexible office spaces. The trend is likely to thrive considering the cost-effectiveness and convenience of such spaces.

Built to Suits Offices

Companies in the IT and IT-Enabled Services in Pune, Hyderabad, Chennai, Bengaluru and even Gurgaon continued to pre-commit large office spaces and prefer Built to Suits office spaces owing to large vacancy rates. While the average rates in tech-driven cities witnessed an increase of 3-4 per cent, the preferred locations witnessed a growth of 10-15 per cent.

Tier-II and Tier-III cities

As the larger metropolitans are consuming more costs, Indian real estate report 2018 hints at Tier-II and Tier-III as possible options for companies wherein state governments are stimulating growth with developments of airports, railway stations and such key infrastructural projects.