Overview of India's Commercial Real Estate Sector

India's top seven cities experienced a significant increase in office leasing in 2024, with a total of 77.2 million square feet (msf) leased, marking a 22.6% year-on-year increase. Global Capability Centres (GCCs) contributed significantly, accounting for 36% or 27.7 msf of this leasing, according to JLL.

India as a Preferred Location for GCCs

• India offers a robust demographic advantage and a large pool of qualified talent at competitive costs.
• The country has attractive real estate pricing and a vibrant work ecosystem.
• India's geopolitical strategy and stable political landscape enhance its appeal to global investors.
• The pro-business environment is reinforced by streamlined regulations and reduced bureaucratic hurdles.

China Plus One Strategy and its Impact

• India benefits from the strategic shift towards nearshoring and friendshoring amidst US-China tensions.
• This strategy has enhanced India's standing in the global market, though China remains a significant player.

Impact of Hybrid Work Models

• The hybrid work model is transforming corporate landscapes, urging organizations to reassess operational strategies.
• There is a trend towards increased office attendance with new flexibility, leading to consolidated, campus-style environments.
• This shift emphasizes purposeful office spaces and strategic space utilization.

Current Upcycle in Indian Commercial Real Estate

• The sector is experiencing an upswing driven by strong macroeconomic indicators and GDP growth of 6.5%.
• Human capital and robust economic growth are key drivers of this trend.

Impact of Global Economic Shifts

• India's commercial real estate market remains stable amid global economic challenges.
• The sector is witnessing robust development activity, increased net absorption, and high-quality space proliferation.

Adapting to Artificial Intelligence (AI)

• AI is revolutionizing the office landscape, enhancing workplace productivity and employee experiences.
• AI's role in real estate includes optimizing designs and decision-making processes with data-driven insights.

Factors Influencing Sustainability of Growth

• Infrastructure development is crucial for sustaining the current upcycle in commercial real estate.
• Enhancements are needed in utilities, transportation networks, digital connectivity, and urban planning.

Opportunities and Challenges

• The Indian real estate sector is on a strong growth trajectory, with a focus on premium properties and evolving regulations.
• State governments are actively refining policies to create a business-friendly environment.
• The sector presents significant opportunities for international business and investment.