Value of investments in office real estate in India 2011-Q1 2022

As of the first quarter of 2022, the Indian office real estate market received 732 million U.S. dollars in investments. In the year 2021, the value of investments was around three billion U.S. dollars despite the prolonged pandemic. This was a significant increase compared to 2020 when investments had already dropped from their highest value in 2018.

An investor’s paradise

Commercial real estate is generally preferred over residential real estate by investors as the former offers higher rental yields. Within the commercial real estate sector, the office segment has emerged as the favorite among investors. Digitalization, policy support, lower interest rates, and growing consumer confidence are increasingly boosting investors’ interest in the segment. Additionally, softening of crypto and other financial markets, renewed interest in the real estate sector. The office sector is slowly recovering from a COVID-19-induced setback as a lot of companies are implementing back-to-office policies leading to growth in demand for office spaces and thereby, leading to an increase in absorption rates.

Investment outlook: The co-working sector

  The expansion of co-working spaces, once dominated by freelance professionals, SMEs, and start-ups, was one of the COVID-induced changes in the real estate market. As large corporates expand their ventures to newer markets and collaborate with co-working operators, there has been an increase in investment activity in the co-working sector. Angel investors, particularly, expect a high return on investment (ROI) from coworking spaces as compared to later-stage investors. With the introduction of real estate investment trusts (REITs) in India, the sector is expected to receive a boost