Indian offices are reopening again, with rental business resuming in most cities. It has also pushed the demand for office space in central business districts, secondary business districts, outlying areas, etc. Anurag Goel, Director, Goel Ganga Developments, shares his real estate insights and decodes whether post-pandemic commercial real estate investing is a good deal.
“According to the latest Colliers report, approximately 30-35% of rental business is managed by IT & ITeS companies. Almost 10-12% is managed by consulting companies. Approximately 15% of demand is driven by spaces , while other major demand contributors include healthcare, e-commerce, consumer packaged goods, manufacturing, etc. Last 8 quarters Along with small and medium transactions, coworking office leases large size (>1,00,000 sq ft) have also increased significantly.Many companies have recently entered into large office deals in India, giving a positive boost to commercial real estate in India.India.While the sector is recovering again, investment activities are also gaining momentum.This is a marked difference from the past two years when, in the face of the crisis, investors began to turn away from the sector. During the crisis, when most individuals were working from home, interest in office assets plummeted and there was a visible trend towards residential assets as they were perceived as low risk,” Anurag said. Goel.
“Nevertheless, trends are changing and there is renewed investor interest in commercial assets again,” Goel added.
Pivot to co-working spaces
“In the commercial space, the co-working segment is emerging as an attractive segment that is attracting interest from investors due to their increased demand in the new normal. According to the latest report from JLL Research, the segment is experiencing 35% annual growth The coworking or shared office segment is gradually moving from the periphery to the center, with demand no longer limited to start-ups, small businesses and freelancers. are also turning to shared spaces as they offer affordable and flexible offerings, and scalable rental terms.Therefore, investors are increasingly interested in the flexible space segment as it can offer flows stable income. Investing in such assets can yield an annual return of around 8-10%,” he added.
Jump in strata sales
“In tandem with other top Asian markets such as Singapore and Hong Kong, the concept of condominium sales is also seeing a surge in demand. While investing in commercial space is usually big business, sales in condominium have greatly simplified the process.Now with a bandwidth of INR 10-30 lacs, one can play in the commercial segment.Commercial developers are also promoting the idea and many of them are spending 25-40% of their projects to strata sales,” he explained.
“Besides investors, small and medium-sized businesses also invest and own such spaces. Investing in an office is a prudent decision for many businesses as it can help them streamline their overall operational expenses. strata in the city can enable businesses to locate in premium locations and significantly boost their overall brand image,” he concluded.
(Disclaimer: Opinions/suggestions/advice expressed here in this article are investment experts only. Zee Business suggests its readers consult their investment advisors before making any financial decisions.)