Indian Commercial Real Estate Witnesses Increase In Dominance Of Global Investors, Says Report

Indian commercial real estate market is witnessing a subtle shift in the way the projects are built, financed and managed. As per a recent report, the Indian real estate has attracted investment transactions worth $2.4 billion in the first half of 2018, up 26% from a year ago.

The commercial real estate is dominated by big global players like Blackstone, Brookfield, Xander, etc., who had remained bullish on investment in this period, as shown by a Colliers Research-RICS South Asia report. Understandably, with the advent of these world-class investment players, the commercial real estate market has also started witnessing structural changes in the way the projects are built, financed and managed.

“In 2018 and beyond, we believe the demand for office space will be led by technology, engineering, manufacturing, e-commerce, logistics, and finance sectors, along with co-working operators,” ET Realty quoted  Nimish Gupta, Managing Director, RICS South Asia, as saying. “The growth in the corporate real estate will however not be without its challenges.”

Gupta further declared that technologies such as automation/artificial intelligence could result in loss of jobs which in turn likely to have an impact on the way companies lease or buy office space. However, for the next three years, the prospects are bright.

The report expects around 120 million sq ft of gross office absorption over the next three years. This demand is likely to be well supported by a robust supply pipeline of about 124 million sq ft of office stock in major Indian cities.

It is the limited availability of debt from domestic financial institutions and banks has led developers to look for private investment in the form of debt, equity and joint ventures.

Clearly, the ownership and management of the Indian commercial real estate are gradually shifting from the private developers to large, sophisticated institutional entities. This shift is most likely to reflect in the quality of the deliverables.

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