Commercial real estate to scale new heights in 2023

The commercial real estate market in India, especially in NCR, is expected to scale new heights in 2023 and beyond, with some interesting trends likely to shape the future of the segment. The Delhi-NCR market is now among the most favored when it comes to seeing some really positive growth, both in rentals and returns of commercial real estate, including retail and office spaces.

Rise India, in its latest report on Commercial Realty, has stated that the Delhi-NCR real estate market is going to witness great appreciation of commercial real estate returns and rentals, in both retail as well as office spaces.

Delhi-NCR is quickly emerging as India’s real estate hotspot, spurred by rapidly expanding start-ups and MNCs who are eyeing to establish their offices and data centers in NCR. Because of the positive trend, leasing activity is picking up in the region’s commercial real estate market. Besides, the retail sector in Delhi-NCR experienced a strong recovery in Q2 2022, sparked by new leases and store openings, and an increased demand for office co-working spaces.

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The growth trend is more noticeable in Gurugram, where the commercial real estate market is seeing increased investment from prestigious investors and industry giants, suggesting that Gurugram retail sale price may overtake Delhi’s retail sale price for the first time in 2023, and is expected to touch 2,40,000 sq ft. While retail spaces are set to witness an appreciation of 20%, retail rental income is expected to breach the 15% mark; and office spaces are expected to witness a price appreciation of 18-20% in 2023, highest in Gurugram.

Talking about Noida, the office market continues to see significant commercial office space take-up, with strong demand from industries like IT/ITES/BFSI, startups, etc., fueling the growth momentum.

In Delhi, the commercial retail realty is expected to grow at about 12%, giving it a fresh impetus for the future. A-grade office space rentals are expected to go up by 22-25% due to regained demand.

Talking about the trend, Vishesh Prakash, Head, R&R by Rise Infraventures, says, “The commercial real estate market is looking buoyant and there is huge demand for acquiring new spaces and renting new spaces. There is upward momentum in both investing and renting in A-grade office spaces and hi-street retail. Also, with demand-supply dynamics in place, the segment is gaining traction like never before. The commercial segment has gained impetus post-pandemic. For investors and users, it’s a great time to invest and reap long-term benefits.”