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Growing Demand for Commercial Property in India

The real estate sector has been a major contributor to the growth of the entire economy and is expected to contribute approx. 13 percent of the country’s GDP in the next 5 years.  If we talk about the improving business environment, the commercial real estate sector can be considered as a prime benefactor. The sector has been boosted with government initiatives such as RERA and GST allowing large institutional investors to pore large investments into Commercial Property in India that further improved the overall business conditions of the country.

Growing Demand for Commercial Property in India

The everlasting expansion of the services sector has led to an increased demand for office spaces and thus can be considered as one of the key growth factors of the commercial real estate segment. It has been projected that the average demand for office space across India will increase by 46 million sq. ft. by 2021. 

Policy reforms such as REIT (Real Estate Investment Trusts) will further boost the growth of the commercial real estate sector by reducing the burden of exalted capital costs of funding projects on real estate developers.

The increasing foreign direct investment in e-commerce markets has led to the growth of the warehousing and logistics sector and has further increased the demand for commercial space benefitting the commercial property sector in India. 

Retail space is also likely to witness strong growth in the coming years and is expected to grow at a rate of 25 percent to 30 percent over the next 5 fiscal years. FM Sitharaman’s budget 2020 has also got some good news for the commercial real estate sector. Setting up new smart cities, development of approx 100 new airports across the country, the formulation of National Logistics Policy, the announcement of National Infrastructure Pipeline will likely augment the demand for commercial real estate sector particularly the office segment.  

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