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Is Office Space the Right Real Estate Investment ?

Posted by kapoor Infra on October 30, 2022
Real estate Investment in india

Real Estate Investment: According to the current situation, Office Space Leasing Jumps 26% To 13 Million Sq Ft During September 2022 Quarter.

Real estate Investment – A Smart Move

Office space leasing in India during the September 2022 quarter stood at 13 million square feet (msf), a 26 percent jump as compared to the corresponding quarter last year.

Real Estate Investment in Industrial and warehousing demand stood at 6.7 msf in Q3 2022, the highest since Q1 2021. Delhi-NCR accounted for the highest share at 56 percent, followed by Pune at 16 percent share. 3PL operators continue to drive demand with a 42 percent leasing share.

Institutional real estate investment in the Indian real estate market closed at $1 billion during the third quarter of 2022, a 54 percent jump year-on-year. Investment volume in 2022 is likely to cross 2021 levels amid positive business sentiment.

After the increase in the repo rate of RBI, many banks have increased their loan rates. However, better business confidence and retail spending during the festive season are likely to support demand activity, the report said.

Ramesh Nair, CEO (India) and Managing Director (Market Development-Asia), Colliers said,

“If the first nine months of 2022 are anything to go by, the Indian real estate sector has bounced back sooner than expected. The office demand has witnessed a doubling of 40.6 million sq ft during YTD 2022 and is likely to cross 50 million sq ft by the end of the year.

However, concerns about an upcoming global slowdown may lead to some short-term volatility in the market in the next 2-3 quarters. Also, the Indian market is relatively resilient and the growing economy will continue to fuel demand across various asset classes”

The report says that Real Estate Due Diligence could occupy a slice of the 300 million sqft pie of existing and upcoming commercial office buildings. The top six cities in India have about 120 million sq ft of old Grade-A stock, which is more than 15 years old.

Due Diligence can help developers and landlords understand the scope of upgrades and gain high traction, especially from those occupied in key micro-markets of major cities.

Modern technologies at workplaces can improve operational efficiency as well as employee productivity. Such real estate investments can yield remarkable benefits and returns for both the landlord and the occupier.

They can look at Minimum Efficiency Reporting Value (MERV) filtration and acceptable IAQ and other recognized standards for ventilation up to MERV 15 to improve and balance air quality,” Colliers said in the report.

After a gap of two years, the return to offices has picked up the pace with the reduction in COVID-19 cases, reflecting positive occupant confidence.

At the same time, about 74 percent of businesses are looking at distributed workspaces as a strategy to move from location-centric to people-centric workspaces.

This is the reason behind office space leasing up 26% to 13 million sq ft during the September 2022 quarter.

This article has been referenced from News18.

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