Indian startup ecosystem is experiencing unprecedented surge. It is positioning itself as a global powerhouse. And profound implication for commercial real estate sector is simultaneously being witnessed.
India is home to more than 70,000 registered startups and valuation of these is in billions. The startup landscape also owes much of its rapid growth to some of the common factors like shifting attitudes towards entrepreneurship, technological advancements, tax incentives and proactive government initiatives.
Tier I cities grapple with some urbanization challenges such as high costs of living and escalating rents. Hence, Tier II and Tier III cities are emerging as new epicenters of economic activity. These are proving attractive to startups. Nearly half of India’s startups now originate from these markets. Hence, the startups are reshaping the demand dynamics for commercial real estate.
There is a growing demand across various segments like offices, retail spaces, warehouses and industrial units. Hence, these have driven up rental prices and asset values in prime commercial areas.
The rise of startups has also catalyzed the growth of flexible workspaces. The modern office solutions cater specifically to the needs of small businesses, freelancers and startups as these are offering affordable and adaptable workspace arrangements.
Infrastructure development has also received a significant boost from the startup boom. New projects are in progress to develop commercial hubs, industrial zones and logistics parks. The initiatives are expanding physical footprint of commercial real estate and also enhancing transportation networks and connectivity.
Technology integration is an added feature of the evolving real estate landscape. Startups increasingly favor commercial spaces which are equipped with smart technologies and sustainable features. They prefer such spaces which provide energy-efficient systems, smart management tools and digital infrastructure.