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What are the major drivers of commercial real estate growth in India?

India’s commercial real estate growth is underpinned by multiple macro-economic and sector-specific drivers:

  • IT & ITeS Sector: The IT and IT-enabled services (ITeS) industry has fueled office space absorption, particularly in Bangalore, Hyderabad, and Pune, where a robust talent pool and competitive rentals attract global tech firms.
  • BFSI Expansion: The Banking, Financial Services, and Insurance (BFSI) sector contributes significantly to grade-A office demand, with Mumbai and Delhi-NCR serving as corporate hubs.
  • Infrastructure Developments: Metro rail expansions, expressways, and international airports enhance connectivity and boost the appeal of secondary cities, reducing pressure on established metros.
  • Favorable Government Policies: Simplified FDI norms and reforms like RERA have increased transparency, encouraging institutional investments in office parks, data centers, and co-working hubs.
  • Growing Formal Workforce: The expanding services sector creates steady demand for new corporate facilities.
  • Emerging Data Centers: Digitalization, AI advancements, and 5G rollout are fueling investments in data center real estate, attracting specialized investors.

Together, these factors create a robust commercial real estate landscape poised for long-term growth and substantial returns.

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