A recent report by CBRE has highlighted India as a high-yield real estate market in the Asia Pacific region. According to the report, India posted the highest real estate yields across key asset categories, including office spaces, retail, logistics, hotels, and student housing. With a surge in commercial activities and the expansion of multinational companies in the country, this presents an opportune time for investors to diversify their commercial real estate portfolios.
Macroeconomic Factors Driving Growth
India's aspiration to become a global hub for commercial activity is supported by several macroeconomic factors. The country's strong economic fundamentals, rapid urbanization, expanding corporate occupier base, and rising domestic consumption are contributing to broad-based demand across sectors. These elements are influencing investor decisions, as India is now viewed not merely as a high-growth market but as one offering depth, liquidity, and scalable institutional opportunities. As more industrial-grade supply enters the market and instruments like REITs, structured debt, and domestic capital become more sophisticated, India's real estate ecosystem is maturing beyond a traditional equity-led market.
Harsh Jagwani, Managing Director of Notandas Realty, shares seven important aspects to consider before investing in commercial property.
Key Elements to Keep in Mind
During this opportune moment, both established and young investors should consider several determining factors when investing in commercial real estate. Here are the key factors to keep in mind while expanding their portfolio in this segment.
1. Proximity
The close proximity of a commercial property to major transportation hubs such as railways or highways, as well as key business districts, plays a crucial role in its demand and growth. It also influences investment value and ease of lifestyle.
2. Infrastructure
The infrastructure of commercial properties has undergone significant changes in recent years. Today, tech-forward and modern spaces facilitate seamless work, improving efficiency and productivity. Modern facilities such as digitally enabled security systems, automated checks and processes, and private elevators for C-suite executives are now integral to new commercial property designs.
3. Design
New commercial space designs focus on integrating a sophisticated lifestyle approach for employees. This includes amenities beyond work, such as cafes, gyms, and pickleball courts. Developers are also designing workspaces that are flexible and sustainability-focused.
4. Demand for Large Offices
Premium office spaces with areas of 100,000 square feet and above are witnessing increased traction in India. This demand is driven by large occupiers, particularly Global Capability Centres (GCCs), technology firms, and multinational corporations expanding their operations in the country.
5. Luxury Commercial Properties
Luxury commercial properties offer higher yields due to their higher quality and the prestige they command. They ensure higher returns and project a higher prestige value when purchased in certain structures and locations. Each developer and category of commercial space commands its own premium and investment value.
6. Category Assets
Offices and hospitality assets are emerging as dominant segments in the commercial real estate sector. Demand for Grade-A office spaces, business hotels, and integrated retail destinations continues to accelerate as global corporations expand their operations in India. Meanwhile, hospitality benefits from both tourism and corporate travel.
7. Changing Demographics
India's urban demographic is reshaping demand for commercial spaces. With the urban population projected to reach around 600 million by 2036, cities are transforming into hubs of economic activity. Developers are increasingly creating mixed-use properties that combine offices, retail, entertainment, and residential components within a single ecosystem.
Transforming Landscape
India's commercial real estate market stands at the intersection of economic ambition and urban transformation. Corporate expansion, infrastructural investments, and demographic shifts are reshaping how cities grow and businesses operate. The next decade could see the sector evolve from a rapidly growing market into one of the defining pillars of the country's economic growth. This underscores long-term confidence in India's office market and will help investors diversify their portfolios across different segments of the sector.
