India to be a top global commercial realty market: Anshuman Magazine

In 2024 and 2025, India is poised to witness one of the highest commercial real estate activities in the world as its consumption and GDP improve, Anshuman Magazine,chairman and chief executive officer (India, South-East Asia, Middle East & Africa), CBRE, tells Raghav Aggarwal in an online interview. Edited excerpts:

How has commercial real estate grown in India in the past few years?
 

India’s commercial real estate, especially office space, has been one of the best-performing markets globally. Unlike the post-Covid-19 slowdown in mature economies, India has seen high activity in the office sector. Last year, there was an absorption of 16.4 million square feet, one of the highest globally. In 2022, the absorption was 57.9 million sq ft, and this year is also expected to be strong.
 

What is the main reason for this?
 

India’s role as an offshoring destination and its deep pool of cost-effective talent are key drivers. Global capability centres (GCCs), research and development, life sciences, and technology sectors have significantly contributed to the 

office demand.
 

What are the key markets for this?
 

The primary markets are Delhi, Mumbai, and Bengaluru, with notable activity in Pune, Hyderabad, and other major cities where talent is concentrated.
 

How has it been for the industrial logistics sector?
 

Last year, the logistics sector took up 39 million sq ft of space, and the momentum is expected to continue this year. Unlike the office segment, India lags in logistics supply, despite strong demand. Decentralisation is spreading warehousing across India, with significant construction and supply underway. Institutional capital is flowing into logistics, improving supply quality and maintaining momentum.
 

How has the performance been for the retail sector?
 

Last year, 7.1 million sq ft of retail space was taken up, with 1.2 million in the first quarter of 2024. The retail sector saw a record year in 2023, with a notable increase from 4.8 million sq ft in 2022. Despite this growth, India's retail sector remains undersupplied. As consumption improves, domestic and foreign retailers are expanding. Retail activity is closely tied to GDP growth, per capita income, and private consumption.
 

Do you think 2024 would be a better year for the retail sector than 2023 given that some European countries are looking at a recession and there is geopolitical instability?
 

It’s early to determine if 2024 will surpass 2023, but momentum is expected to continue. Given the undersupply, 2024 should be a good year for retail. However, whether it will exceed 2023 will be clearer by the third quarter as new supply completion data becomes available.
 

And what about 2025?
 

In 2024 and 2025, India’s commercial real estate will remain very active. While it’s hard to predict the exact increase in million square feet, India is expected to have one of the highest levels of activity in the commercial real estate market compared to many other countries.