Indian commercial real estate is observing a lot of interest from investors in the year 2017. Real Estate market is expected to see inflow of investments as REIT (Real Estate Investment Trusts) finally enters its implemented phase.
Sectors including IT, ecommerce and BFSI, have been major growing demand drivers for commercial real estate sector. They have more recently been cutting down on their costs to bring in efficiency and hence there would be a sharp decrease in demand going forward from these sectors.
However, these industry players have started cutting down on their costs in recent times which could result in a sharp decrease in their demand going forward, suggested the report.
For some time now, IT companies that used to build/buy spaces of their own have now shifted to leasing spaces for offices. This is an industry-wide change and as the global business for IT companies improve, they may going forward lease more spaces to ramp up operations.
Since, lower grade office spaces may find it difficult to find occupiers other than markets like Bengaluru, Hyderabad, Chennai and Pune. Developers and owners of these spaces may have to upgrade and standardize their properties to be RERA compliant spaces.
A possible disruption in commercial space leasing business could be a concept called “co-working spaces”, which is still in its initial stages. Co-working spaces are fully functional offices, shared by professionals. Such spaces typically provide desks, cabins, meeting rooms, internet, cafe services and other basic resources. They are convenient as there is zero setup time and cost to be invested by a user. Co-working spaces are more affordable than offices, and are being adopted by businesses in cities.
