India's Office Space Goldmine: $48 Billion Up for Grabs
Fractional ownership market expected to exceed $5 billion by 2030
Real EstateSm ReitFractional OwnershipOffice SpaceIndiaReal EstateMay 30, 2024
The growth prospects are being driven by the Small and Medium Real Estate Investment Trust (SM REIT) licence, with several players like Strata, hBits, and WiseX already filing for the licence or in the process of doing so. hBits has announced that its first property will be listed as an SM REIT within three months, with most new properties expected to be in major cities like Delhi, Mumbai, and Bengaluru.
The top hotspots for asset acquisition under the SM REIT umbrella are Mumbai and Delhi NCR, with tech markets also showing notable growth potential. Mumbai, Delhi NCR, and Bengaluru lead the SM REIT market, representing 73% of assets in the top seven city office sectors.
According to Dr Samantak Das, Chief Economist & Head of Research and REIS, India, JLL, Mumbai presents unparalleled opportunities for SM REITs, offering a healthy mix of well-leased large and mid-sized assets ideal for acquisition by Fractional Ownership Platforms. With over 55% of the Grade A office market, equivalent to 84.4 million sq ft of assets, available and suitable for SM REITs, the investment potential reaches approximately $18.7 billion.
Kunal Moktan, Co-founder & CEO of Property Share, added that SM REITs provide a tremendous opportunity to monetise income-generating assets that currently lack liquidity and have the potential to transform the real estate investment landscape in India.
Mumbai leads with a $9 billion opportunity for SM REITs, followed by Delhi NCR. Both cities offer well-managed portfolios of small and mid-sized leased assets under a strata-ownership model. Gurugram dominates the Delhi NCR office segment, capturing 61% of the SM REIT market, with significant opportunities in commercial corridors like Golf Course Extension and MG Road presenting a $3 billion investment potential.
Bengaluru supports a robust office ecosystem driven by strong tech demand. However, with large tech parks under institutional or single developer ownership, the SM REIT opportunity stands at approximately 51 million sqft. Key areas include the ORR Southeast stretch and Whitefield.
Hyderabad offers healthy opportunities for SM REITs, led by assets in the Hitec City and Gachibowli corridors representing a $3.7 billion opportunity.
The Indian real estate market has seen significant growth in recent years, driven by increasing demand for office spaces, residential properties, and other assets. The introduction of SM REITs is expected to provide a boost to the market, offering investors a new asset class and opportunities for fractional ownership.
JLL is a leading professional services firm that specializes in real estate and investment management. Property Share is a fractional ownership platform that provides investors with opportunities to invest in commercial real estate assets.
Frequently Asked Questions
What is the current value of India's fractional ownership market?
Around $500 million
What is the expected value of India's fractional ownership market by 2030?
Over $5 billion
Which cities are expected to lead the SM REIT market?
Mumbai Delhi NCR and Bengaluru
What is the total value of office assets available for SM REITs in India?
Approximately $48 billion
What is the goal of hBits in terms of Assets Under Management (AUM)?
To triple AUM from ₹365 crore to ₹1 000 crore by the end of the next fiscal
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