Bengaluru scores above all on positive office rent growth on most quarters

India's real estate is set to reach $25 trillion by 2047, said Abhishek Kiran Gupta, CEO, CRE Matrix, reaching an 8% contribution to India’s GDP. While the current office space takes up 860 million square feet, and will touch 4 billion square feet by 2047.

Bengaluru: Bengaluru saw a positive rent growth in 44 out of the past 50 quarters up to the third quarter (July to September) of this calendar year, according to the commercial property rental index for offices made by IIM Bengaluru in collaboration with CRE Matrix released on Friday.

This performance is the highest across the top cities that together cover 90 per cent of India’s Grade A/A+ office stock.

With a 12-year compound annual growth rate (CAGR) at 6.9 per cent, Pune has seen the highest growth across India. Bengaluru ranks third at 5.3 per cent CAGR, following Chennai which is at 5.5 per cent.

Speaking on India’s commercial market, Ananth Narayan, whole time member of the Securities and Exchange Board of India (Sebi), observed, “The Indian market has a huge potential for Real Estate Investment Trusts (REITs) and has just scratched the surface”.

The six REITs currently registered with Sebi have a total of assets worth Rs 1.4 lakh crore, managing about 13 per cent of the country's Grade A commercial assets.

Narayan also highlighted valuation as a crucial area where more work is needed from analysts and industry leaders, as Sebi, as regulators, is “lousy in figuring out what valuation ought to be” while ensuring there are adequate disclosures.

Yet, he recalled a conversation between the Sebi chairperson and four of its members, where it was estimated that between Infrastructure Investment Trusts (InvITs), REITs, and monetisation of all productive real estate and infrastructure assets being run by the government, the potential for monetisation is likely equal to India's GDP.

India's real estate is set to reach $25 trillion by 2047, said Abhishek Kiran Gupta, CEO, CRE Matrix, reaching an 8 per cent contribution to India’s GDP. While the current office space takes up 860 million square feet, and will touch 4 billion square feet by 2047.

“We will cross 1 billion square feet next year itself,” he added.