Commercial Property Investment Can Give Investors Great Returns During 2022-23

Experts agree that the Covid outbreak has had a positive impact on the real estate market. Recognizing the importance of owning a home, sales grew rapidly. It has brought fence-sitters back to the forefront of securing their investment by buying real estate.

The residential and commercial real estate sector is a prosperous, sustainable, and promising investment niche. Investment costs of commercial properties are slightly higher than residential, but commercial investment lasts a lifetime and promises consistent returns.

Robust Trends

According to the latest report by a leading consultancy, India's real estate sectors will experience stable and sustainable growth in 2022 compared to 2021. With the completion of mass vaccination campaigns and minimal spread of infection, confidence in office space and commercial occupiers is higher than ever, and demand is gradually growing.

Another such report highlights that the office space absorption will exceed 60 million sqft. in metro and non-metropolitan cities by 2023. The sluggish demand over the last two years has turned into an agile and flexible working model, which is driving demand for commercial real estate. The leading occupiers would be the large businesses dealing in IT-Business Process Management (IT-BPM), E-commerce, and consulting. The above trends represent a great opportunity for investors to invest in commercial real estate.

• Demand for coworking spaces is increasing across India. In addition to metro cities, top tier 2 cities such as Ahmedabad, Jaipur, Indore, and Coimbatore are also attracting growing businesses to flex space.
  
  It’s an excellent opportunity for investors to include co-working in their investment portfolio due to the rise in the co-working sector. The sustained increase from 2022 proves that this is a significant source of rental income.
   
• A new but innovative niche segment of the commercial real estate sector is a fast-growing data center. Although challenging in almost every aspect, pandemics have been blessed by disguising the digital payment ecosystem. The surge in digital transactions required the establishment of data centers across India. Leading IT giants are exploring both Tier 1 and Tier 2 cities to deploy their data centers, which is a huge opportunity for the investment community.
  
  With the rise of e-commerce activities, online education, data consumption, and payment ecosystems, demand for data centers will increase by 25-35% over the next two years, providing investors with a great opportunity.
  
  Numerically, the current capacity of the Indian data center market is 445 MW. An additional 290 MW will be added in 2022 alone. This defines the huge growth potential of the data center market.
  
  In addition, the government’s mandate of data center localization will force large IT companies to set up secure data centers across India.

Conclusively, the commercial real estate market has always remained a robust but low-key player in the real estate industry. It has proven to be a cash cow and will continue to do so considering the rapid rate at which the Indian economy is growing.

Conclusion

The commercial real estate market has always been a strong but cautious player in the real estate industry. Given how fast the Indian economy is growing, it has been proven and will continue to be a cash cow.