As we enter into the real estate investment landscape, staying ahead of emerging trends is paramount for investors seeking lucrative opportunities. The year 2024 presents a plethora of trends shaping the industry, from the rise of digitalisation to shifting preferences in property ownership. Currently, the Indian Real Estate Market presents significant growth potential due to emerging trends. Its market size is expected to reach USD 1 trillion by 2030 and contribute 13% to India’s GDP by 2025. Among these trends, the commercial real estate market stands out as a focal point for potential growth and investment.
Let us go through this blog to understand the top commercial real estate trends.
What Are the Emerging Trends in Real Estate 2024?
Here are some of the top real estate market trends in 2024:
Rise in Workspaces
Commercial real estate, such as the demand for co-working spaces, is booming currently. Investors who have been investing in this sector for a long time are seeing substantial returns due to the longer leases and steady income. India’s co-working space market is expected to reach around USD 1.53 billion by FY2031 and is anticipated to grow at a CAGR of 13.47% since FY2024.
Emergence of Sellers’ Market
With increasing demand and limited supply, commercial spaces favour sellers. Prices are expected to rise as more people enter the real estate market, driving up the demand for commercial properties. The demand for fractional ownership has increased due to the rise of fractional ownership platforms like WiseX, PropShare and Strata, among others. Furthermore, the fractional ownership platform added 3,000 crore worth of AUM over the last 3 to 4 years.
Infrastructural Development
Urban cities including Tier II and III cities are becoming attractive investment destinations, due to government initiatives and economic growth. With improved infrastructure and job opportunities, these cities are expected to see a surge in commercial development. Over the last decade, Andheri has become a popular office location due to better connections to the suburbs and planned metro lines. Due to this, the job vacancy rates have dropped significantly, from about 18% in 2018 to around 10% in 2024. Additionally, the demand for flex office spaces is increasing in Tier 2 and 3 cities due to flexible working hours, hybrid work, and more. India’s flex office space is expected to reach $9 billion by 2028 with a 15% CAGR.
Integration of Technology
Technology is changing how commercial real estate works. Smart buildings with sensors and AI-driven decisions are making things more efficient and better for tenants. These tech advancements will bring big growth in the sector.
Focus on Sustainability
Investors care more about environmental and social factors when investing in real estate. They want buildings that are eco-friendly and have green certifications. According to the reports by JLL, sustainable buildings are expected to attract more occupiers due to their reduced operating and energy expenses. As more businesses commit to net zero goals, the demand for sustainable buildings will rise, and BREEAM-certified buildings may require less investment to meet these targets.
Impact of E-Commerce Changes Logistics
Online shopping is growing fast, so there is more need for warehouses and delivery centres. Real estate investors are putting money into these places to cash in on the booming online market in India. The e-commerce logistics market is growing rapidly and is expected to reach $7.24 billion by 2029. Furthermore, government initiatives like digital payment, UPI, etc. are playing a crucial role in the expansion of the market and thus leading to the growth of warehouses.
Growth of Commercial Real Estate in Key Metro Cities vs. Tier 2 Cities in India
While key metro cities lead in commercial real estate development, tier 2 cities offer promising growth prospects and opportunities for investors and businesses looking beyond the metros.
Key Metro Cities
In key metro cities like Mumbai, Delhi-NCR, Bengaluru, and Pune, the office real estate market is witnessing robust growth. This growth is primarily driven by the demand from the banking and financial services, IT sector and consulting firms. These cities dominate the market due to their well-developed infrastructure and availability of skilled labour. The metro cities are witnessing increased adoption of smart building systems and coworking management platforms, enhancing operational efficiency and tenant experience.
Tier 2 Cities
These cities offer lower real estate costs and are emerging as business hubs, attracting companies seeking to expand beyond the metros. The office real estate market in tier 2 cities is driven by factors such as the booming IT sector, rapid urbanization, and government initiatives to attract foreign investment. Furthermore, there is a growing emphasis on sustainable and green buildings in tier 2 cities, offering developers and investors opportunities to capitalise on the demand for environmentally friendly spaces.
The Bottom Line
As we look at the changing commercial real estate trends in 2024, it is quite evident that properties such as office spaces, warehouses and such, are great options for investors. By choosing a reliable investment platform and planning your investments carefully, you can set yourself up for success in the commercial real estate landscape. One such platform is Aurum WiseX, where you can invest in top A-grade commercial real estate properties. It evaluates over 150+ data points for selecting high-quality investment properties from which you can earn monthly rentals of up to 10%. To learn how you can invest in this sector, check out our comprehensive guide on commercial property investment.
