Indian retrofitted office buildings have potential value of $1.28 billion

Once upgraded, the buildings will become more investible and adept to be bundled into a REIT 

According to Colliers’ latest report, the retrofitting of around 100 one million square feet of office space has INR90 billion (USD1.28 billion) worth of unrealised value in the top six cities of India, reported ET Realty.com.

Developers and landlords are missing investment opportunities, and the report says that the upgradation of buildings will make them more investible.  

As a result, investors and developers can bundle these reformed buildings into a REIT. Investors are currently putting their stakes on under-construction buildings due to a shortage of readily investible assets.  

Ramesh Nair, chief executive officer India & managing director, Market Development, at Colliers India, said, “This is an opportune time for landlords to upgrade their properties. Many occupiers are considering moving from old-generation to new-generation buildings and, more than ever before, looking at aspects like HVAC upgrades, improved indoor air quality standards, and smart features.”  

He also adds that the focus of upgradation will be on modern amenities that will boost operational efficiency and enable collaboration.  

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Additionally, demand for such buildings will come via introducing new interests in tenants.  

“Occupiers are also looking at a reduced CAPEX from their side. In this context, retrofitting buildings will revive demand by generating a renewed sense of interest among occupiers. While up-gradation can involve increased costs, landlords can see the rental appreciation of up to 20 percent,” he said.