About 60 million square feet of additional green Grade A office space has been pre-certified or is being discussed for green certification in Hyderabad, Pune, and the Delhi National Capital Region (NCR), a report by a real estate consulting firm said.
Flex and hybrid workspaces and green technologies are going to be the underlying themes for the office sector this year, said the report by Colliers titled Real estate outlook for 2023.
At the end of 2022, office leasing in India exceeded 50 million square feet (msf), of which 14 percent was contributed by flex players, the highest in any year, it said.
"As the market peers into 2023 amidst a looming global recession, and ongoing layoffs by tech companies, they are likely to increase their space take-up in flex spaces as they offer flexible lease terms and aid cost control,” Colliers said.
At the same time, the focus on upgrading office buildings will be high on the agenda, as about 120 msf of Grade A offices opt for refurbishment in the country’s top six cities, the consulting firm said.
Demand for industrial and warehousing space in India increased by 8 percent year on year in 2022.
Global investors have been collaborating with Indian developers to create investment platforms to fund the development of new projects and the expansion of existing projects.
"Platform deals worth more than $2 billion were announced in 2022 for the industrial and warehousing sectors, with a focus on developing new age warehousing structures outfitted with AI (Artificial Intelligence) and IoT (Internet of Things) management systems for seamless dispatch and order tracking," the report said.
In 2023, growing demand for quick commerce, in turn, is likely to increase the demand for micro-warehouses/dark stores, which, in turn, would lead to higher demand for hub warehouses, the report said.
Dark store is a retail distribution centre or warehouse that caters exclusively to online shoppers.
Hope for stuck projects
The report added: "During 2023, special situations credit is also expected to pick up, to aid stuck projects that are on hold due to liquidity constraints. Moreover, green financing is likely to drive major investment decisions as domestic and offshore investors seek quality Grade A projects that are ESG compliant."
ESG is short for Environmental, Social and Governance, criteria used to measure a company’s sustainability.
"On the investments front, interest in core assets will continue, but investors will continue to unlock value potential in alternate assets such as data centres. AIFs (Alternative Investment Funds) will see greater traction this year,” said Ramesh Nair, Chief Executive Officer, India & Managing Director, Market Development, Asia, at Collier’s.
In 2022, global investors partnered with Indian developers for platform investments of about $2illion in the industrial sector.
“These funds would be deployed for developing best-in-class and tech-enabled warehouses in the coming years," Vimal Nadar, Senior Director and Head of Research, ät Colliers India.
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