Despite the economic challenges faced by the global village, the arena of Commercial Real Estate (CRE) in India has been quite varied showcasing growth and resilience at the same time. As of now, the estimated size of India’s CRE market stands at a robust USD 33.62 billion. Astonished, the forecasted CAGR of 21.1% is from 2023 to 2028 as the anticipated market size is expected to rise to USD 87.57 billion.
There has been a staggering expansion in agreements signed for leasing out managed office spaces. Henceforth, there was a percentage surge of 12% in the second quarter of 2023; in comparison to quarter one. A total of 13.9 million square feet were leased during this period, a testament to the resilience and attractiveness of the Indian office real estate market.
A period of three months witnessed Bangalore, Chennai, and Pune signing 59% of all the managed spaces leasing proposals/agreements. What draws companies to these locations? It’s not merely the square footage; it’s the allure of fantastic locations, top-notch facilities, and notably, the budget-friendly prices for renting these spaces. Nonetheless, office real estate investment comes with a handy futuristic approach apart from the eye appeal.
The era of smart buildings:
Pioneering a sustainable tomorrow
Managed spaces have entered the sphere of smart building systems starting new trends in the industry. By the year 2032, these new systems are calculated to command a value exceeding $500 billion. The people of the industry are leveraging the power of smart technology to transform managed spaces into eco-friendly, highly efficient entities. By harnessing the capabilities of Artificial Intelligence (AI) and Machine Learning (ML) to predict and optimize energy usage based on multifaceted factors like weather patterns and occupancy.
The factor of adaptability is the major beautification that is put across to the audience/consumers. These managed spaces have the capacity to integrate new and better solutions with the evolution of technology. Thus, they act as catalysts that not only keep pace but also stay ahead in the digital era. Energy optimisation emerges as a pivotal advantage, enabling businesses to curtail operational costs, a crucial factor in the competitive marketplace.
Beyond efficiency: The reputation advantage
The benefits expand beyond operational efficiency. The reputation of the enterprise is enhanced by being situated in a smart, sustainable building. It becomes a symbol of forward-thinking, eco-conscious business practices, an asset that resonates strongly with clients and investors alike. It is an opportunity to be showcased as an environmentally responsible and committed organisation – a persuasive attribute that can wield considerable influence in a world increasingly prioritising sustainability.
Navigating risks in the future landscape
Yet, risk accompanies the promising trends that the industry upholds in the current scenario. Inherent challenges – economic uncertainties, geopolitical shifts, and unforeseen disruptions remain constant factors. The rapid pace of technological evolution brings its own set of risks, necessitating constant adaptation and robust cybersecurity measures to safeguard sensitive data and operations within these smart-managed spaces.
Conclusion: Charting the course ahead
As we navigate the future of managed space investment, it’s evident that the path forward is illuminated by the convergence of technological innovation and sustainability. The growth trajectory of India’s CRE market underscores its resilience and potential, while the integration of smart building systems represents a pivotal evolution in redefining managed spaces.
To capitalise on these opportunities and mitigate risks, stakeholders must prioritise flexibility, innovation, and sustainability. Embracing cutting-edge technologies while maintaining a vigilant stance against potential threats will be the cornerstone of success in this dynamic landscape. As the Indian CRE market continues its upward ascent, those at its helm must remain adaptable, forward-thinking, and committed to leveraging the transformative power of smart buildings to create a future where efficiency meets sustainability in perfect harmony.
(The author, Sanjay Choudhary, is the founder & CEO at Incuspaze)
