OFFICE REAL ESTATE TO SEE STRONG DEMAND

The Indian office market has remained largely immune to global macro & sectoral headwinds. As more enterprises explore the remote workplace policy, we are seeing a broad shift towards flexible and modern office solutions.

With demand being robust, the biggest challenge for flex workspace operators could turn out to be locking-in quality real estate supply in the central business districts of the top 7 cities at favourable rents. We expect at least 4 mature players to list in the next 2-3 years."

Currently, flex workspace operators are enjoying 30%-35% stable-state, center-level IRRs in both co-working and managed offices. As the industry matures, the returns profile of the industry is expected to gradually stabilize more towards 20% - 25% IRR levels, which would still be much higher than what some other real asset classes provide.