Commercial Real Estate In 2023-24: How To Avoid Distractions And Stay The Course- By Anurag Goel, Director, Goel ganga developments

The commercial real estate market in India is expected to reach new heights in 2023 and beyond, with some interesting trends likely to shape the future of the segment. This market is now amongst the most favoured when it comes to seeing some really positive growth both in rentals and commercial real estate. The year 2023 promises to create a chapter of stellar growth for commercial real estate in India. As a consequence of geopolitical uncertainties, this sector has emerged as the protector of strength which has given a boost to the Indian economy.

The Indian commercial real estate market has not only stabilized macroeconomic forces but also significantly mitigated the outflow of foreign exchange from the country. Commercial properties not only provide remunerative rental returns over extended time frames but also become force multipliers by stimulating the growth of the real estate ecosystem.

Additionally, the coming year is assured to prompt property demands as the market rallies across a lifted market sentiment across all commercial asset classes. With an undulating high demand, financial experts are confident that the country’s real estate market will grow at a CAGR of around 13% between FY 2022 to FY 2023.

Market growth approaches have undisputedly indicated Grade-A office properties yielding some of the highest returns across the commercial real estate segment. The stereotypical processing of this fact was best exemplified by an impressive rise in the demand for office space, which witnessed an unprecedented 50% growth in 2022.

Time-tested and popularly believed to be immune to market volatilities, Indian real estate has remained faithful to the investor’s expectations through the many ups and downs in the last couple of years. Positive expectations and high rise have shown to sustain themselves and many experts do believe that it would continue like this in the coming year.

No doubt young investors would believe real estate is low or boring but it would hardly be the case. Commercial real estate has something for every kind of

investor. Commercial real estate funds are making their presence felt in the market as the idea of earning passive income from safe real estate investment has found a lot of excitement among small-time investors. The coming year may bring a lot more options for such investors who do not have portfolios in crores. The entire picture of the Indian economy in 2023 displays an expected rise of 8-9% as overall growth, an expected rise in jobs, and a bounce back in the stock market.

All these would ultimately contribute to an increase in the demand for housing as more people would enter the commercial housing market which is something really important for the real estate economy. Apart from any speculations we all know that our government is planning and implementing infrastructure mega projects such as highways, metros, new airports, etc as well as policies like “HOUSING FOR ALL” and “Pradhan Mantri Awas Yojna”.This shows how quantitatively and qualitatively there is an increase in commercial real estate assets.

The most overbooked and passed-on tier-2 and 3 real estate markets stand to benefit the most from such positive developments and are highly likely to fetch investors handsome returns.

Commercial real estate is one of the most attractive assets in the real estate game and is also set to see high returns as major IT companies are switching back to office after COVID-19. E-Commerce farms are also in a race to spread as widely as possible by expanding their warehouse and logistic operations.IT giants like INTEL and APPLE are moving their manufacturing units to India and more companies are now following them to India which will lead India to gain the top position as the world’s top silicon chip manufacturer.

The commercial housing market is the accelerator of growth and sustainer of the entire real estate economy and is set to witness an extremely impressive potentially its best year in the future. Residential sales are whooping up by 51% during the post Covid-19 period. According to experts prices are expected to rise nearly 7.5% all over India and also a number of other economic indicators also favor a positive uptick in 2023.

A growing economy, a return to the pre-pandemic working state, and various government initiatives all, in addition, are creating a very beneficial environment for the prosperity of the commercial real estate market in years to come.