PETALING JAYA: The implementation of real estate investment trusts is expected to generate more commercial growth in India’s financial segment, according to Jones Lang LaSalle (JLL) India.The firm recorded 31 office projects encompassing 6.5 million sq ft space, taking India’s total operational stock to 405.9 million sq ft in the fourth quarter of 2014 (4Q14). This year, a total of 35.6 million sq ft of office space is expected to become operational.

“Many retail investors would be able to get into the commercial real estate game through REITs. The new format offered by some developers these days allows retail investors to get into commercial real estate,” said Anuj Puri, chairman and country head of JLL India.

Anuj said there are other factors that make commercial real estate investment a safer bet, such as the impact of Achhe Din (Better Days) — a slogan made popular during India’s recent general election which saw Narendra Modi becoming Prime Minister in May last year.

“The pan-India net absorption during 2014 was up by more than 11% and reached 29.9 million sq ft. Bangalore’s extraordinary performance along with increased quarter-on-quarter contributions with Pune, NCR-Delhi and Hyderabad helped to achieve such a robust level of absorption.

The start-up boom is also a key factor in the growth of the commercial segment.  The renewed confidence is not only among global players but also lending Indian corporates, a major cause in driving demand for commercial real estate in India’s tier-1 and tier-2 cities.  — theedgeproperty.com

This article first appeared in The Edge Financial Daily, on May 13, 2015.