India's GCC landscape is set to grow tremendously, with their count expected to more than double from the current 1,700 to over 2,200 by 2030, according to a new report launched on Friday by SBI Capital Markets (SBICAPS).
The State Bank of India's (SBI) domestic investment banking business also projects a big 25–30% boost in assets under management (AUM) for Real Estate Investment Trusts (REITs) over the next few years. This will be propelled by diversification across asset classes and a steady flow of investment opportunities.
In office leasing space of commercial real estate, calendar year 2024 (CY24) has already surpassed past records by 20%, reflecting an upward trend in rental prices along with a decline in vacancy levels. The positive trend is expected to continue through 2025 with Bengaluru, Delhi-NCR, and Pune leading the process.
Multinationals, particularly those setting up or increasing their GCCs, have been the largest drivers of this leasing boom. Unlike previous models of cost arbitrage, multinational companies are now leveraging their Indian operations for core business activities. SBICAPS puts a 1.3x growth in GCC activity over the next couple of years.
Flexible office spaces also witnessed an unprecedented boom, with leasing during the first half of CY25 rising 43% year-on-year — the highest ever level for any six-month period.
"Formalisation of the sector, which began with RERA and IBC, has reached a crescendo. These have fueled the hunger for funds. Promoters have aggressively borrowed from the QIP route in FY25 to raise equity," noted the report.
The report further pointed to a change in the funding dynamics, with Alternative Investment Funds (AIFs) being increasingly engaged in the initial and risk-higher phases of land purchase and construction finance.
For CY25, the real estate space has been the largest AIF investment sector, drawing close to twice the amount of capital than the next highest segment. With well-developed regulations favoring institutional investment and more stable sectoral cash flows, SBICAPS forecasts that avenues of raising capital — ranging from IPOs and AIFs to sovereign wealth funds — will stay in play.
Emphasizing the strong potential of commercial property, the report underlined that the office segment presents diversified opportunities for various investor risk profiles. With a favorable regulatory framework and REITs looking to grow AUM, SBICAPS anticipates wider retail investor participation in the segment in the future.
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