Recent times have seen substantial surge in both International & domestic Participation in the Indian real estate sector. Ease in FDI policy & other policy change is further contributing towards the involvement of the former towards Indian real estate.
Out of the various asset classes, the Commercial/ Office asset class have seen a significant increase in investment. Led by IT/ITeS, BFSI, Life Science & Start-ups, there has been a surge in demand for Grade-A quality office space.
According to the recent half yearly report published by Square Yards, higher rental yields, better absorption & limited supply is increasingly making it a bright investment opportunity to capitalize. Keeping faith on the future prospects of the Indian economic outlook, Investor fraternity is aggressively looking towards investing into the Indian Commercial Sector.
According to research by Cushman & Wakefield, by the end of 2015, the total investment potential in Grade-A properties stood at USD 54-67 Billion with a rental potential of around USD 5.4 billion.
Along with HNIs, national & international Private Equity (PE) players are also betting on the Indian office markets.
Subdued Supply
The commercial market still suffers from limited supply that primarily emanates due to more emphasis on the residential properties by Indian developers in the recent times. As a consequence, there is a crunch in terms of the right kind of Grade A type office space in India.
New Supply
Major Real Estate Developers are aggressively venturing into the development of world class office space. DLF, one of India’s largest developer have started off work on a new project in Gurgaon comprising of 2 million Sq. Ft of office space. Raheja Group is investing USD 300 million in developing a commercial space in Navi Mumbai comprising of 6 million Sq. Ft. Panschshil Realty, backed by Blackstone is going to invest roughly USD 400 million in 3 commercial projects in Pune.
