Mumbai, April 4 The office market across top seven cities in India offers an estimated Rs 45,000 crore (approximately $5.3 billion) opportunity in retrofitting (improving the existing building design and engineering, integrating new technology, enhancing user experience, and incorporating climate-adaptive features and capabilities) and upgrading existing buildings, according to a report on Friday.
Approximately 62 per cent of India's Grade A office stock across top seven cities, equivalent to 530.8 million square feet (sq ft), requires upgrades – spanning from light to moderate to deep interventions.
The Silicon Valley of India leads in office retrofitting opportunities offering the largest potential among major Indian cities, with 155.9 million sq ft of Grade A stock, requiring an estimated Rs 14,410 crore in upgrade spends.
This presents both a challenge and an unprecedented opportunity for stakeholders across the industry, said the JLL report.
The focus of this transformation opportunity is primarily headlined by four key markets - Bengaluru, Delhi NCR, Mumbai, and Hyderabad - which account for about 81 per cent of the total capex spend.
These four markets also represent about 75 per cent of occupier activity in the country and, thus, need critical developer and investor interventions to keep office assets ‘relevant’.
“Around 32 per cent of India's office stock was built earlier than or in the first decade of the new millennium. Even assets built later but prior to 2020 need to look at upgradation considering what tenants need today, given the changing dynamics around the need for offices to become 'experiential', fulfilling the twin objective of being modern (agile, tech-driven, amenity-rich) and sustainable/low-carbon,” explained Dr Samantak Das, Chief Economist and Head of Research and REIS, India, JLL.
Post-retrofit rental premiums offer tangible returns, while improved occupancy rates and longer lease terms further enhance the per-square-foot value of assets.
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In some prime locations, such as Mumbai's SBD-BKC and western suburbs, these premiums could soar even higher, reaching an impressive 40-50 per cent.
“Upgrading older buildings is not just about modernisation; it's a strategic imperative in today's competitive real estate landscape,” said Aditya Desai, COO-Project and Development Services and Head-Investor Solutions.
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