By Shantanu Gambhir, Co-Founder and MD, RISE Infraventures Limited
Investors and developers are navigating a landscape that increasingly values sustainability, flexibility, and technological integration. As hybrid work models become the norm, green building standards gain prominence, and smart technologies revolutionize property management, real estate’s opportunities and challenges are expanding. Understanding these emerging trends is crucial for investors aiming to make informed decisions and capitalize on the growth potential within this ever-changing sector.
The real estate sector has seen an increasing number of buyers seeking a balance between luxury living and environmental responsibility. The fusion of eco-friendly living with upscale amenities has created a unique niche for luxury homes set amidst landscapes and spacious surroundings. This trend sees a rising demand for sustainable living solutions where high-end comfort and natural beauty are seamlessly integrated. A recent report highlights a growing trend in the demand for luxury homes equipped with eco-friendly features. In the first half of 2024, luxury residences priced above Rs 1.5 crore accounted for a notable 45% of housing sales in the National Capital Region. This represents a substantial rise from just 3% in 2019, indicating a pronounced shift towards upscale living that integrates environmental sustainability.
The COVID-19 pandemic has accelerated the adoption of hybrid work models, blending remote work with in-office attendance. This shift has led to decreased demand for traditional office space while increasing interest in flexible, adaptable work environments. Investors should consider diversifying their portfolios to include properties that cater to these new work patterns, such as co-working spaces or buildings equipped with advanced technology and flexible layouts.
Sustainability has become a crucial factor in real estate investment decisions. Investors increasingly prioritise properties with green certifications and energy-efficient features due to regulatory pressures and growing tenant demand for environmentally responsible spaces. Green buildings not only offer long-term cost savings through reduced energy consumption but also often command higher rental rates and attract premium tenants. Integrating sustainability into investment criteria can enhance portfolio resilience and appeal. 45% of commercial real estate projects in India are now incorporating green building standards, according to the Indian Green Building Council, 2023. Prominent reports suggest that 30% of new office spaces in India are expected to achieve LEED (Leadership in Energy and Environmental Design) certification by 2025.
Technology is revolutionizing the commercial real estate sector, with smart buildings becoming a significant trend. These buildings leverage technology to optimize energy usage, enhance security, and improve overall tenant experience. Investors should look for properties that incorporate smart technologies, as these features can increase operational efficiency, reduce costs, and attract tech-savvy tenants.
The surge in e-commerce has driven unprecedented demand for industrial and logistics real estate. Warehouses and distribution centres are becoming crucial to supply chains, leading to increased interest in these types of properties. Investors can capitalize on this trend by focusing on industrial spaces near major transportation hubs and urban centres, where last-mile delivery is crucial. Additionally, the rise of omnichannel retailing is increasing demand for flexible, multi-use properties. According to a recent study, warehousing and logistics properties are in high demand, with significant investment opportunities in this sector. The industrial real estate market is expected to grow to $40 billion by 2025.
Mixed-use developments which combine residential, commercial, and retail spaces within a single project, are gaining popularity. These developments cater to changing consumer preferences for walkable, self-contained communities that offer convenience and a high quality of life. Investors should explore opportunities in mixed-use projects, which can provide diversified income streams and reduce risk by integrating multiple asset types. Smart buildings in India can achieve energy savings of up to 25% through advanced building management systems.
The growing emphasis on health and wellness is influencing commercial real estate design and development. Buildings that incorporate features promoting tenant well-being, such as improved air quality, natural light, and wellness amenities, are becoming more desirable. Investors should consider properties that align with this trend, as they are likely to attract tenants who prioritize health and well-being in their workspace or living environment. A recent study says 70% of Indian office tenants are willing to pay a premium for buildings with wellness certifications and health-oriented features.
As trends and technologies in the real estate sector continue to evolve, both investors and developers will play a crucial role in enhancing the quality of life for residents. The integration of sustainable practices, advanced technologies, and innovative designs is reshaping how we approach real estate development and investment. These advancements not only meet the growing demands for eco-friendly and smart living environments but also drive the creation of more efficient, comfortable, and connected spaces. By staying ahead of these trends and involving emerging technologies, stakeholders in the real estate sector can significantly improve living standards and contribute to a more sustainable and prosperous future for all.
