Office space demand recovery gets broad-based as small, mid-sized deals pick up
The pandemic had a significant negative impact on the commercial real estate sector. Public gatherings were outlawed to slow the spread of the virus, which put a stop to corporate demands for office space. Numerous developments are coming in from all over the world as things are improving every day.
A solid recovery is taking place in the commercial real estate market, especially in the small- and medium-sized office space segment. Since the beginning of this year, both the volume of direct transactions and lease agreements have significantly increased. Deals are being secured across a broad spectrum, with the majority involving office spaces between 10,000 and 50,000 square feet.
The 10,000–50,000 square foot commercial office space is starting to see an increase in transactions, according to Real Estate Investment Trusts (REITs) and many other well-known builders with a sizable portfolio. Surprisingly, additional transactions that go above and beyond the upper limit are also being recorded.
What does that imply?
Due to the rise in transactions, the real estate market will experience explosive growth over the next few financial quarters, particularly for office space and other corporate setups. For investors, this may be a once-in-a-lifetime opportunity to purchase these unique assets. In the top 8 Indian cities, the overall volume of deals in the 20,000–35,000 square foot category has increased by 71%.
The best chance for real estate investors to expand their portfolio may be the grade A business parks that are developing in the nation’s major financial centers. Since many multinational corporations are establishing their Global Capability Centres in India, the demand for office space could rise even more.
These businesses want to establish their centers for blockchain technology, healthcare technology, cyber security, and machine learning. This shows that the nation’s real estate industry is one that consistently demonstrates its capacity for growth.
According to Vikaash Khdloya, CEO of Embassy REIT, the company is collaborating with these businesses to explore the possibility of expanding their operations. He added that the current multinational corporations are increasing their physical presence in India, which is driving up the demand for medium- and large-sized office space.
His company has signed 15 such agreements for medium-sized office spaces with an average area of 25,000 square feet. It has entered into several lease agreements for commercial office space totaling more than 1 million square feet.
What are the future of these office space real estate investments?
Commercial office spaces of all sizes are becoming more and more popular, as was discussed in the article’s previous section. Businesses are becoming more interested in renting or buying commercial office spaces between 10,000 and 50,000 sq ft, whether they are medium-sized or large-scale operations.
Does this indicate that now is a good time to invest in this real estate sector? The information you’ve already read about the facts contains the answer. And most likely, yes, now is a good time to invest in assets related to commercial office space. However, there is a catch.
Alok Aggarwal, CEO of Brookprop Administration Companies, stated that his company is continuing to demonstrate strong operational and financial efficiency with a 6% increase in the natural increment from the previous quarter. With steady leasing demand from new clients, the company’s gross leasing remained constant at 3.11 lakh sq ft in the first quarter. This is mainly because office work has resumed since the pandemic situation has been brought under control.
On a lighter note,
By looking at the aforementioned statistics, you must have realized how quickly office space for businesses is growing. The future of commercial real estate investors as a whole, not just the spaces, can be improved. The pandemic-related decline of the real estate sector wasn’t all that long ago.
However, the real estate industry has benefited greatly from how times have changed. Whatever the future holds, real estate as a different investment option today comes highly recommended to would-be investors. The market value of this industry is anticipated to be around $10 billion.
We can conclude that the phenomenal increase in demand for office space is by far the best news for investors. Hearing this news is a huge relief, isn’t it? However, if you start using a reliable platform for contemporary alternative investments, things can start to go right.
Real estate is just one of the many alternative commercial investments that Assetmonk can handle all in one place. You can join us with ease and start your journey of successful investment with us.
Let’s conclude this brief article with the most recent changes in the commercial office space sector. Thank you, and enjoy the rest of your day!
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