 "NEIL MURRAY, chief executive officer (CEO) of real estate management services at JLL")
India’s top seven cities saw office leasing of 77.2 million square feet (msf) in 2024, a 22.6 per cent year-on-year increase. Of the total leasing, global capability centres (GCCs) accounted for 36 per cent, leasing 27.7 msf of office space in the country, according to JLL. During his recent visit to India, NEIL MURRAY, chief executive officer (CEO) of real estate management services at JLL, shared his insights on the country’s growing commercial real estate sector in a video conversation with Prachi Pisal. Edited excerpts:
Why is India becoming a preferred location for GCCs?
India has a robust demographic advantage and a vast pool of qualified talent at competitive costs. Attractive real estate pricing creates an enticing value proposition for corporations worldwide. Yet, India’s true differentiator is its vibrant work ecosystem.
In the geopolitical arena, India has masterfully leveraged global tensions to its advantage. By maintaining diplomatic equilibrium with diverse nations, it has positioned itself as a beacon of stability in an increasingly volatile world. The country’s political landscape, characterised by steady leadership, has cultivated a pro-business environment that resonates with global investors. At the federal level, there is a concerted effort to streamline regulations, dismantle bureaucratic hurdles, and pave the way for seamless business operations.
India presents a unique value proposition — a rare fusion of demographic dividends, cultural vibrancy, political stability, and economic pragmatism.
Is the China Plus One strategy working well for India in the commercial real estate market?
The strategic shift towards nearshoring and friendshoring, coupled with ongoing US-China tensions, has undeniably strengthened India’s position in the international market. This recalibration of global supply chains and business operations has cast a favourable spotlight on India’s commercial real estate sector.
However, it is crucial to maintain a balanced perspective. While India is capitalising on these geopolitical shifts, China remains a big player in the global business arena. Its established infrastructure, vast consumer market, and manufacturing capabilities continue to hold strategic importance for multinational corporations and real estate investors alike.
What impact do you see of hybrid work models on the office segment?
The evolution of hybrid work has become a transformative force in the corporate landscape, particularly in the Indian market. This shift has compelled organisations to reassess their operational strategies, with a keen focus on employee location tracking and compliance.
As we emerge from the pandemic era, there is a noticeable trend towards increased office attendance, with a new layer of flexibility. This transition is reshaping employers’ real estate strategies, moving from decentralised, smaller offices to consolidated, campus-style environments. The new paradigm places considerable emphasis on purposeful office spaces.
This hybrid model has fundamentally altered businesses’ real estate approach. It has driven a more intentional and strategic utilisation of space, aligning it closely with organisational goals and employee needs. The current landscape presents an exciting opportunity for innovation in commercial real estate, as the industry adapts to these evolving workplace dynamics and expectations.
Can we say that this is an upcycle in Indian commercial real estate?
India’s commercial real estate sector is seeing a definitive upswing, propelled by robust macroeconomic indicators. The nation’s impressive gross domestic product growth rate of 6.5 per cent serves as a solid foundation for this surge, positioning India on a trajectory to potentially become the world’s third-largest economy. This economic momentum is creating a ripple effect across various sectors, with the commercial real estate market emerging as a prime beneficiary. The upward trend is not merely a cyclical fluctuation but appears to be underpinned by sustainable, long-term growth factors.
At the heart of this boom lies India’s greatest asset — its human capital. The convergence of strong economic growth, the promise of further expansion, and the availability of top-tier talent is crafting a compelling narrative for India’s commercial real estate sector.
As the country continues its economic ascent, the real estate market is poised to mirror this upward trajectory, offering promising opportunities for investors and businesses alike.
What impacts of the global economic shift are you seeing on India’s commercial real estate market?
In the face of global economic turbulence, India’s commercial real estate market has emerged as a paragon of stability. While markets worldwide grapple with major challenges, India’s sector has demonstrated remarkable resilience, sidestepping the dramatic inflation spikes and cap rate fluctuations that rattled other geographies.
India’s strategic global positioning and business-friendly environment continue to drive its real estate sector. The market is witnessing robust development activity, rising net absorption rates, and a proliferation of world-class, high-quality spaces.
As the global economic landscape evolves, India’s commercial real estate market stands poised for continued expansion, underlining its status as a prime destination for international business and investment.
How are Indian offices adapting to artificial intelligence (AI)? What investments are they willing to make in this technology?
India’s office landscape is riding the crest of an AI-driven revolution, echoing the global buzz witnessed at Davos. At the forefront is agentic AI, which goes beyond simple query responses to executing complex tasks, dramatically boosting workplace productivity.
In the real estate realm, AI’s impact is equally profound. It is reshaping employee experiences, optimising building designs, and revolutionising decision-making processes through real-time, data-driven insights. This transformation, likened to a new industrial revolution, is still in its infancy, promising exciting developments ahead.
A pressing global challenge, including in India, is employee retention. High turnover rates impact the bottom line, prompting companies to reimagine workplace strategies. Real estate, as the physical embodiment of corporate culture, is now pivotal in fostering employee engagement and loyalty.
How long do you think this upcycle will last? What factors concern you?
India’s commercial real estate sector is riding a robust upcycle, driven by surging demand from both domestic and multinational corporations. However, the sustainability of this growth trajectory hinges on a critical factor: infrastructure development.
The strain on existing infrastructure in certain areas is becoming increasingly apparent. To maintain the momentum of this upcycle, a strategic and sustained focus on enhancing the surrounding infrastructure is imperative. This includes not just basic utilities but also transportation networks, digital connectivity, and urban planning.
What is your outlook on the sector in terms of opportunities and challenges?
The Indian real estate sector presents a uniquely strong growth trajectory, outperforming its global counterparts. This market is characterised by an increasing focus on premium properties and an evolving regulatory landscape, with state governments actively refining policies to foster a more business-friendly environment. Given these factors, our outlook for India’s real estate market remains highly positive, positioning it as a standout performer in the global property arena.
