Indian commercial real estate flourishes in Q2 2022, steady growth expected throughout the year

Due to pent-up demand, office and retail saw a triple-digit increase YoY in H1 2022

The Indian property market had a good run in Q2 2022, with sturdy growth in leasing activity for most segments on both an annual and quarterly basis.

Financial Express reported that the commercial real estate market in the country is projected to expand at a CAGR of approximately 13 percent from FY 2022-2027.

Due to pent-up demand, office and retail saw a triple-digit increase YoY in H1 2022, according to CBRE’s India Market Monitor Q2 2022.

Data further revealed that office supply addition reached 26.1 million sq ft in H1 2022, up by 26 percent YoY, with small- to medium-sized deals — up to 50,000 sq ft — occupying almost 84 percent in Q2 2022.

Although there has been an influx in flexible work arrangements, many occupiers have yet to explicitly define hybrid working and develop appropriate policies and guidelines.  As the office evolves into a hub for collaboration, flexible seating arrangements are becoming more important. 

More: India becomes top destination for foreign investments, NRIs focus on real estate

Meanwhile, Business Insider listed Bengaluru, Delhi, and Mumbai as part of the Asia Pacific region’s most expensive commercial real estate markets. 

With an annual rent of USD51.6 per sq ft, Delhi NCR is the 10th most expensive commercial real estate market in the APAC region. Mumbai came in 11th, with commercial property rates at USD45.8 per sq ft per year. Lastly, with an annual rent of USD20.5 per sq ft, Bengaluru placed 22nd.

“In 2022, real estate investments are expected to grow further on the back of a strong rebound across asset classes. With total capital inflows reaching USD3.4 billion in H1 2022, we expect these investments to rise by over 10 percent versus the 2021 benchmark,” said Anshuman Magazine, Chairman & CEO – India, South-East Asia, Middle East & Africa, CBRE.

The commercial real estate market in India is highly competitive. Strong office space absorption, declining vacancy rates, and rising rents are making it a desirable location for international institutional investors.

The Property Report editors wrote this article. For more information, email: [email protected].