Demand for commercial property in India robust, US, Europe struggle

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Demand for commercial property in India robust, US, Europe struggle

real estate, construction, rate hike, interest rate hike

Illustration: binay sinha

Demand for commercial property in India is robust, says the Royal Institution of Chartered Surveyors (RICS) in its recently released Global Commercial Property Monitor (GCPM) report which has presented the analysis for the first quarter of the financial year 2023-24. 


The report tracks the global sentiment around commercial real estate to understand the trends in the economies around the world.

The report said that occupier demand for offices in the US, France, and Germany went down by 38, 50, and 25 per cent respectively. Whereas Saudi Arabia, UAE, India, Singapore, and China registered increased demand of 75, 60, 52, 50, and 17 per cent respectively.

In other words, advanced economies were seen to be struggling in demand for commercial real estate whereas developing economies did much better on this parameter.

The unabated interest hikes by the Federal Reserve of the United States have resulted in a situation where cheap money is no more available. Central banks around the world have resorted to fiscal tightening.

Unsurprisingly, this has resulted in a credit situation that indicated a deteriorating environment. RICS report said that 50 per cent of the respondents in its survey suggested that the picture for the commercial real estate market has worsened. The situation was more depressing for the US where 70 per cent of respondents were pessimistic.

The credit situation in the European economies also followed the same trend. On the other hand, the situation in the Asia Pacific and the Middle East, and Africa mostly improved.


Demand and Supply gap


The demand-supply gap told a similar yet not identical story. The report showed that India had an increased demand for commercial space along with Malaysia and Singapore. On the other hand, demand was lower when compared to the availability in China, Australia, Japan, and Sri Lanka.

First Published: May 09 2023 | 9:16 PM IST

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