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Commercial Real Estate Market in Delhi

Writer's picture: Kriti ChawlaKriti Chawla

Looking to lease a nice office or retail space for your newly created business, or maybe you’re looking to put your exclusive commercial space on rent but not sure about the market overview about such properties? We got you covered in this blog where we discuss the commercial real estate market in Delhi-NCR.


A commercial real estate is a property made for use for commercial purposes. The commercial dealings of such properties are made in the Commercial Real Estate Market. It has a strong laid out foundation throughout India and is infused with extreme competition. Despite the negative setbacks of Covid-19, the post-pandemic growth rate at a CAGR of 13% serves as a testament of how resilient the market is. Furthermore, with an increase in commercialization in post-pandemic times, several cities throughout India are in high demand for the requirement of fresh office space with Delhi-NCR leading the charge. Government initiatives and development policies have served as catalysts to ensure greater transparency and competency in this sector which has made three groups of people (investors, developers, and buyers) much more engaging than before. It is without a doubt that the future of the commercial real estate market, especially in Delhi, is bright.


commercial building in Delhi
ARise, an upcoming commercial building in New Delhi

A. Setback from Covid


With Covid hitting the world, people all over the world had no alternatives but to adapt and embrace new ways and challenges for survival. Work from home has been such a method that people quickly embraced. In the year 2020, the market had shrunk 30% of what it was a year before. With uncertainties everywhere and rising Covid cases, no face-to-face interactions and on-site visits made commercial dealings impossible. This had led to the shrinkage of potential investors and buyers entering into the market.


Decrease in leasing, buying, or selling of commercial real estates, halted transactions of pre-leased properties, and delays in signing agreements are all negative impacts on the commercial real estate market due to Covid.



B. Post-Pandemic Market Overview


With decreasing rates of Covid cases, we are seeing healthy growth of the market again which goes to show the tremendous resilience of the market, especially in the region of Delhi-NCR which is the second-highest city in terms of leasing office spaces. Among several other cities in India, Delhi NCR has seen the biggest rise in demand for leasing commercial real estates with a staggering 36% increase in post-pandemic times. In the year 2022, it is expected to see an absorption of leasing top quality office spaces at around 700 million sq. ft. where the majority fall under Delhi NCR. Real estate properties like offices, hospitality, and retail all are expected to be on-demand again as we are going back to our normal days again. Requirements for these property groups are because of the commercialization and rise in numbers of new businesses in Delhi. This growing momentum of leasing commercial properties is expected to last in the coming years. Furthermore, as people are now more adaptive and used to dealing with Covid with preventive measures, transaction volumes have seen a 40% increase over the previous year.



Moreover, the government has taken some initiatives and policies which have increased the transparency of the market. This had led to positive impacts in the sector such as an increasing number of potential investors and customers entering the market. Developers are more cautious than before on the completion of their respective projects. Additionally, this nature of the market is also very attractive to customers as well.



C. Competitive Market


major commercial companies in commercial real estate in delhi ncr

The commercial real estate market of India is a market infused with strong competition with a solid laid out foundation. Such market characteristics are a good indicator of foreign and national investments. The big players of the commercial real estate market are a few. Oberoi Realty, DLF, Godrej Properties Ltd, and other big companies hold an authoritative capacity of offering commercial properties, and smaller companies not being able to sustain themselves are often merging with the big ones because of the sheer competitiveness of the market.



Conclusion


Despite the negative effects of Covid, the commercial real estate market has significant promise of incremental growth in the next decade. With its strong foundation and competitiveness, the commercial real estate market attracts investors, developers, and customers all over the world. In the post-pandemic time, the demand for office leasing has increased in several cities in India where Delhi is standing at the forefront.


Commercial real estate investments in Delhi NCR promise healthy profitable income and with its growing transparency and competency, the market is much adhered by many. What are some new commercial real estate companies you have noticed that are coming up with speed in this market? Let us know in the comments below!


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