Commercial property

Investing in commercial real estate can pay you back in 2022-23; here’s how

Experts would agree that the coronavirus pandemic has had a positive impact on the real estate market. Sales picked up fairly quickly given the growing awareness of the importance of owning a home. This brought fence keepers back to the forefront of safeguarding their investments by purchasing real estate.

The residential and commercial real estate sector is a thriving, sustainable and high-potential niche in which to invest. Although input costs are a bit higher than its residential counterparts, commercial investments last a lifetime and promise consistent returns.

Here’s a look at how commercial real estate investing will prove to be a gem in your investment portfolio in 2022-23.

Healthy trends

According to the latest Outlook 2022 report from Knight Frank, compared to the year 2021, India’s business and real estate sectors would experience stable and sustainable growth in 2022. With the mass vaccination campaign over and the minimal spread of the virus infection, confidence in office space and commercial occupants is at an all-time high and demand is gradually increasing.

This fact can be corroborated by the joint report of the charcoal makers and Qdesq. The report highlights that the absorption of office space will cross 60 million square feet in metropolitan and non-metropolitan cities by 2023. The lukewarm demand of the past two years has transformed into an agile and flexible working model and c is what drives real trading. real estate demand. Large companies specializing in IT process management (IT-BPM), e-commerce and consulting would be the main occupants. The mentioned trends present an excellent opportunity for investors to make an investment in commercial real estate.

Request for coworking spaces

There has been an increased demand for coworking seats across India. Additionally, along with metropolitan cities, Tier 2 cities such as Ahmedabad, Jaipur, Indore, and Coimbatore are also attracting growing businesses to the flexible spaces.

The rise of the coworking sector is an excellent opportunity for investors to include this niche market in their investment portfolio. With its sustainable rise from 2022, this can prove to be a great source of rental income.

Request for Data Centers

A new but revolutionary niche segment of the commercial real estate industry is the burgeoning data center segment. Although the pandemic has been difficult in almost every aspect, it has been a blessing in disguise for the digital payment ecosystem. A tremendous increase in digital transactions has necessitated the establishment of data centers across India. Big IT giants are exploring Tier 1 and Tier 2 cities for data center establishments, which represents a huge opportunity for the investment community.

With the increase in e-commerce business, online education, data consumption and payment ecosystem, the demand for data centers will increase by 25-35% over the next two years. which represents an excellent opportunity for investors.

To put it in numbers, the current capacity of the Indian data center market is 445 MW. An additional 290 MW is expected to be added in the year 2022 alone. This defines the enormous growth potential of the data center market.

Moreover, the government’s data center location mandate will compel major IT companies to set up secure data centers across India.

In conclusion, the commercial real estate market has always remained a robust but discreet player in the real estate sector. It has proven to be a cash cow and will continue to do so given the rapid pace of growth in the Indian economy.

(Anurag Goel is Director, Goel Ganga Development)

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