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Commercial real estate (CRE) forms the backbone of India’s booming economy.
Rapid urbanization, growing disposal income, and tech advancements are all contributing to the unprecedented growth of commercial spaces.
On the other hand, this boom provides lucrative opportunities for businesses and investors alike.
If you are looking to understand the whole picture behind commercial real estate, and commercial retail spaces and wondering how to select properties and locations for your retail business, this article will be a one-stop to all your questions.
What Is commercial real estate?
Commercial real estate refers to properties used exclusively for business activities or income generation.
Unlike residential properties, CRE focuses on commercial use cases like offices, retail spaces, warehouses, hospitality, etc which we’ll go through in a minute.
As we mentioned earlier, CRE is an essential driver of economic growth, providing employment opportunities, business opportunities, and serving as a critical investment avenue for many.
Types of commercial real estate in India
The commercial real estate sector is diverse. Below are some of the major commercial real estate types you should be aware of whether you’re looking to start your business or looking to invest.
1. Retail properties
India’s retail real estate space is thriving with its 91 million sq ft of commercial retail spaces in 7 metro cities and is expected to grow 45% more by 2028.
These commercial real estate are likely to be driven by these major retail formats:
i) Shopping malls
Iconic malls like DLF Mall of India (Noida) and Phoenix Marketcity (Mumbai) became entertainment and lifestyle hubs, rather than just shopping malls.
These malls host global and domestic retail brands, multiplexes, and food courts, attracting millions of visitors annually.
| You can have a look at our comprehensive report on top malls (Q2 and Q3 of FY 24-25) in India based on footfall data for the year 2024 to understand the dominance and importance of shopping malls.
ii) High street retail
Prestigious shopping streets such as Khan Market (Delhi) and Brigade Road (Bengaluru) represent premium retail options. These areas attract a mix of luxury brands and boutique stores, catering to all walks of customers seeking a diverse range of products.
iii) Standalone stores
These single tenant commercial real estate properties are occupied by standalone brands like Reliance Digital, Decathlon, and the like of it. These standalone stores often serve as flagship locations, showcasing the full range of a brand’s offerings.
iv) E-Commerce friendly spaces
The rise of online shopping has driven demand for hybrid retail spaces that integrate in-store shopping with e-commerce operations. Examples include stores offering click-and-collect services or serving as micro-fulfillment centers for faster delivery.
| Related read: GeoIQ helped a quick commerce brand estimate market demand for dark stores.
v) Hypermarkets and supermarkets
Large retail outlets such as Reliance Retail, Big Bazaar, and DMart are crucial for urban and suburban consumers. These spaces offer a wide range of products, from groceries to household items, under one roof.
These commercial spaces are increasingly adopting smart technology, like automated checkouts and inventory management and they’re having food courts inside to improve the customer experience.
2. Individual office spaces
Office spaces are particularly driven by the IT and ITeS (Information Technology enabled Services) sectors. These spaces cater to a wide range of businesses from small, to medium to large and are instrumental in boosting India’s economic growth.
3. Grade A offices
These are premium office spaces located in central business districts (CBDs) and metropolitan cities and offer state-of-the-art amenities for their tenants such as modern elevators, high-speed internet, and 24/7 security.
For example, companies like Infosys and TCS have their headquarters in such Grade A offices to ensure providing a great working experience and employee satisfaction.
4. Co-working spaces
These spaces are flexible, shared office environments are popular among startups, freelancers, and small businesses.
These spaces, such as WeWork, and Awfis provide facilities like conference rooms, networking events, and community-driven workspaces. These spaces can rented yearly, monthly, or even for a day.
5. IT parks
Large office campuses like Hyderabad’s HITEC City and Pune’s EON IT Park cater to multinational corporations such as Microsoft, Google, and Accenture.
These spaces typically offer advanced infrastructure, seamless internet connectivity, and tax benefits, making them a preferred choice for global businesses.
6. Industrial Real Estate
The industrial real estate sector is experiencing significant growth, fueled by the “Make in India” initiative. Industrial clusters in Chennai, Pune, and Gujarat host large-scale manufacturing facilities for industries such as automobiles, chemicals, and textiles.
7. Hospitality
Luxury hotel chains like Taj, Oberoi, and Leela anchor premium commercial spaces, hosting corporate events and attracting high-end travelers. On the other hand, budget hotels, including OYO Rooms and Ginger Hotels, choose strategic locations to serve budget-conscious travelers efficiently.
8. Mixed-Use developments
Mixed-use developments generally combine residential and commercial spaces. This is one of the major real estate trends and one major example of this includes Nexus Vijaya Mall in Vadapalani, Chennai which is strategically placed right beside residential apartments.
How do you choose a commercial property for your business?
Selecting the right commercial space for any business is crucial to its success.
While hunting for a commercial property make sure you check these 3 boxes:
1. Pinpointing a location
Opt for locations with high foot traffic, with relevant target demographics. Study the local population’s purchasing behavior, income levels, and preferences.
Having complementary brands that attract similar ICPs would help your business and opening your store next to a competitor can actually benefit your business if the location is right.
You should also check for the average rent of commercial properties, accessibility to transport hubs, etc to land in a perfect location where you can then start searching for a commercial property.
These factors affecting locations can be easily analyzed by signing up on our location intelligence platform for free!
2. Selecting the perfect property that fits
To select a perfect property for your business, you should choose a space that fits your inventory and display requirements. Electronics retailer Croma carefully selects commercial real estate spaces that allow for both product display and interactive customer experiences.
To make the whole process simpler and smoother, here’s how our product suite can help you:
The shortlisted markets by the leadership will appear in the MarketConnect app, (also built-in under our location intelligence platform), providing BD teams with a clear list of areas to focus on.
From a single dashboard, the BD team can view properties based on leadership priorities, including rent, carpet area, and more. The BD team can upload survey reports, which leadership can download as PDFs in seconds, making the process seamless.
Since MarketConnect centralizes all property discussions, updates, and survey reports, the collaboration between leadership, BD teams, and brokers becomes much smoother and more efficient.
Sign up on our platform now and explore the features for free!
3. Analyzing & negotiating budget and lease terms
Compare the rental costs of the property with your expected revenue to ensure profitability. The rental costs can be accessed easily through the MarketConnect app. Local brands in tier-2 cities, such as bakeries and boutique stores, often prioritize cost-effective leasing options.
If possible, negotiate the lease terms for flexibility and understand maintenance costs. Big retailers often enter long-term leases in emerging areas to secure favorable terms and benefit from future growth.
Quick fact: We not only help you choose the ideal location and property but also predict your business’s revenue range with our location intelligence platform!
Conclusion
Understanding the nuances of commercial real estate in India is key to making informed decisions.
Whether you are setting up a retail business or expanding your operations, make sure you thoroughly evaluate the multiple factors we’ve gone through with our platform to choose a commercial space that supports your business goals and maximizes growth potential!