Commercial Real Estate in India: A Sector Rebounding Strong

India’s commercial real estate sector is staging a powerful comeback after pandemic-related disruptions. Office spaces, co-working hubs, retail outlets, and warehousing are witnessing robust demand thanks to economic revival, digital commerce growth, and a dynamic business ecosystem.

A Shifting Office Space Landscape

The Indian office space market absorbed over 40 million sq. ft. in 2023, a 15% increase from the previous year, according to Knight Frank India. Cities like Hyderabad, Pune, and Chennai are leading in Grade-A commercial space supply.

Trends Shaping the Sector

1. Hybrid Workspaces: With hybrid work becoming the norm, flexible office spaces like WeWork, Awfis, and Smartworks have seen occupancy rates climb to over 75%.
   
2. Sustainable Infrastructure: There is a rising demand for green-certified buildings. Developers are investing in LEED and IGBC certifications to attract ESG-conscious clients.
   
3. SEZ to Office Parks: Many IT and ITeS companies are reconfiguring SEZs into multi-purpose office campuses to accommodate evolving work formats.
   

Warehousing and Logistics Boom

Driven by e-commerce giants like Amazon and Flipkart, India’s warehousing segment saw an investment of over $1.2 billion in 2023 alone. Leading logistics parks are emerging in cities like Bhiwandi, Hosur, and Guwahati.

• Kunal Chandra, Managing Director of Cushman & Wakefield India, notes: “The rise in 3PL logistics and cold chain demand is catalyzing warehousing growth in new corridors.”
  

Retail Segment Bouncing Back

While retail was initially hit hard, Tier-2 cities are now becoming lucrative markets. Malls and high-street retail spaces are seeing up to 85% leasing recovery.

• Shishir Baijal, Chairman and MD of Knight Frank India, says: “Retail is no longer metro-centric. Rising incomes and aspirational consumption in smaller towns are real growth engines.”
  

Rise of REITs

Real Estate Investment Trusts (REITs) like Embassy, Brookfield, and Mindspace have brought transparency and investment opportunities in commercial real estate. According to NSE data, REITs in India generated a steady 7–9% annual return in FY24, even amid global uncertainty.

India’s commercial real estate is evolving with the times. With robust leasing activity, high investor interest, and adaptive business models, the sector is set to become a global commercial realty hotspot.