Commercial real estate sector and India’s economic growth have inter-linked. The better the commercial segment, the more is the economic growth rate of the country. Today’s scenario reaching the heights of commercial project, which shows the right time for the growth for investors to invest in commercial projects.
The number of factors like increasing involvement of REITs and NRIs in office spaces, expansion of companies, etc is contributing towards the promising future.
Commercial real estate sector in India is poised only for growth in 2019 and the years coming ahead. The growth is further accelerated by institutional investors.
Moreover, governmental reforms like Make in India, GST, and the introduction of RERA (Real Estate Regulatory Authority) has brought much-required changes in the sector.
Even though the developers, investors and the sector as a whole had teething troubles initially, but this has resulted in much more consolidation and transparency in the system.
Consequently, the scenario has brought back the interest of HNI’s (High net worth Individuals) and increased the amount of FDI (Foreign Direct Investments) in the commercial real estate sector of India.
Let’s have a look at how the commercial real estate sector beholds growth for the investors.
Involvement of Real Estate Investment Trusts (REITs):
REIT owned properties leased by leading MNC’s include office space in Mumbai, Delhi, Chennai, Bangalore, and Hyderabad. Quality office spaces in the corporate districts of these cities are expensive and witness a lot of business.
Therefore builders involve more REITs to invest in projects currently under development and enjoy a new financing source, an alternative to banks.
The investors can expect a solid return on their investments as these REIT financed properties grow in number. The Indian property market expects to witness a lot of money changing hands in the process, promising a busy future.
NRIs interest gets revived:
The ups and downs of the Indian real estate market in recent years are building a path for the NRIs to gradually increase their investment in this sector. It has been observed that NRIs are acquiring properties in India of commercial nature. Thanks to the new policy reforms by the government.
Apart from new reforms, easy loan facilities are provided to NRIs. There are high rental yields in commercial assets and low maintenance cost as compared to residential property.
Moreover, nearly 50% of the vacant commercial office spaces are being occupied by the NRIs with clear chit facility from the bank. All these factors have been roping in the interest of NRIs and contributing towards the growth of the commercial real estate sector on the country.
Increasing demand for co-working or hybrid workspaces:
Growing startups are in constant need of workspaces that provide flexible work-hours, commercial environment and host of other facilities. Besides this, millennial are able to get advantages in terms of reduced rental costs and flexibility in payment norms.
Therefore, co-working or hybrid workspaces are proving to be a boon to these upcoming companies. The trend is expected to continue for the rest of 2019 eventually giving a boost to the commercial real estate sector.
Besides the above-mentioned trends, the upward growth trend in the service and industrial sector have also helped in accelerating the growth of the commercial real estate segment as well as the growth for investors to invest in commercial projects. Large e-commerce players are keen on expansion.
Hence logistics and expanded warehouses are also expected to maintain the growth for investors to invest in commercial projects.