The commercial real estate is space is witnessing a new trend: the rising popularity of shop-cum-office (SCO) complexes, which combine retail and office environments in a single space.
SCO complexes are emerging as a favourite choice for developers, especially in the Delhi-NCR (National Capital Region) micro market, say experts.
They say that the appeal of SCO complexes rests in their ability to cater to a diverse range of businesses -- from retail stores to offices to healthcare centres and fitness hubs. This versatility, combined with relatively low entry costs and high rental yields of 9-10 percent, has made SCOs an attractive investment option for developers and investors alike.
A joint report by FICCI-Colliers showed that India's commercial office market has achieved “record-breaking” absorption of 66.4 million square feet (msf) in 2024 and the market is projected to touch 65-70 msf demand in 2025.
What are SCO complexes?
They house high streets, hypermarkets, offices, retail units, co-working spaces, restaurants and cafes. They also offer spaces for healthcare centres, banks, ATMs, fitness centres, and gyms.
Market observers say that India’s office real estate market is projected to grow from $33.41 billion in 2024 to $117.04 billion by 2029, at a CAGR (compounded annual growth rate) of 28.5 percent.
According to a report by Knight Frank, there has been a significant 44 percent year-on-year (YoY) increase in office space leasing across eight major cities, underscoring the growing appeal of SCOs.
Manoj Gaur, Chairman, CREDAI National and CMD Gaurs Group, said that in recent years, SCOs have gained significant traction, particularly in NCR, because of its efficiency.
“These hybrid structures seamlessly blend retail, office spaces, recreational facilities, and food zones, meeting the modern demand for convenience and multi-functionality. That's why SCOs are a highly sought-after investment option," Gaur said.
According to market data, the potential for capital appreciation is substantial, with prices of SCOs having appreciated by 350 percent to 450 percent between 2011 and 2020. The absorption rate has also risen by 25 percent in the last few years. Much of this demand is driven by small and medium enterprises (SMEs) and startups seeking business solutions that SCOs offer.
SCO hotspots in NCR
Several SCO projects have been successfully operationalised in the NCR. In Gurugram alone, 71.6 acres of land have been developed for SCOs over the past two years, with the segment expanding annually at a rate of 30-40 percent.
SCOs are typically situated in commercial sectors and in multi-corporate zones that have easy accessibility from all parts of the city and major infrastructure.
In Gurugram, sectors abutting Dwarka Expressway, Golf Course Road, and Golf Course Extension Road are proving to be SCO hotspots. Sales of SCO plots is also rising with developers like Adani Realty selling SCO plots in Gurugram.
In Noida, the SCO hotspots include sectors abutting Noida-Greater Noida Expressway, Greater Noida West region, Noida sector 98, Sector 62, Sector 72, and Sector 73. Cities like Faridabad and Ghaziabad are also swiftly turning into preferred SCO destinations.
Mohit Goel, Managing Director, Omaxe Group, said that the attention of investors and end-users have increasingly turned towards SCOs due to their suitability for a wide range of businesses.
“In the last two to three years, the popularity of SCOs has grown immensely, and it is now at the forefront of commercial real estate development. Even though most of NCR has witnessed a spike in SCO development, Faridabad has emerged as one of the few areas offering relatively low entry costs and high ROI," Goel said.
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