SynopsisIndia’s office real estate market is shifting towards a leasing-led model, with developers, REITs and institutional investors increasingly retaining assets instead of selling them, reducing the availability of premium office spaces for outright purchase.AgenciesIndia’s office market is witnessing a structural shift as developers, institutional investors and REIT-backed platforms increasingly favour leasing over asset sales, altering the supply mix of commercial real estate and reducing the share of premium office spaces available for outright purchase across the country’s top property markets.The trend is reflected in the ownership profile of the market. Single owners and REITs together account for 72% of the country's 1,085 million sq ft of ready office inventory, while assets under multiple ownership structures comprise 27% of the stock, showed CRE Matrix data.The pattern is also visible in the 550 million sq ft of under-construction and planned inventory, where 61% of the supply is controlled by single owners and REITs, narrowing the pool of premium office assets available for outright acquisition.“Outright acquisitions continue to attract interest, particularly for Grade A and A+ assets in prime locations, as ownership offers greater operational control and long-term yield potential for HNIs and ultra-HNIs looking to build rental portfolios. However, the pool of investable assets available for sale in this segment remains relatively limited as REITs and institutional capital gain prominence, prompting more developers to retain office assets and build annuity portfolios," said Abhishek Kiran Gupta, Co-Founder & CEO of CRE Matrix.Demand for outright office acquisitions remains resilient, driven by occupiers seeking strategic assets, family offices looking for stable income-generating properties and high-net-worth investors diversifying beyond residential real estate."The buyer profile in the outright office market has broadened over the last few years owing to stable yields, quality assets, and long-term appreciation. Apart from occupiers, we are seeing growing interest from family offices and private investors who view office assets as a stable income-generating asset class with lower volatility and stronger governance standards than many alternative investments. Some wealthy buyers are also looking to acquire assets and retrofit them to enhance yields," said Viral Desai, International Partner & Senior ED, Knight Frank India.The trend is also visible in Mumbai's luxury residential market, particularly in South and Central Mumbai, where ultra-high-net-worth individuals and business families are increasingly looking at commercial real estate as an extension of their investment portfolios and business interests. Offices close to premium residential enclaves are emerging as preferred assets, although the stock of institutional-grade properties available for sale remains limited.While leasing continues to dominate India's office market, outright ownership remains an important segment for several categories of investors and occupiers. The limited availability of institutional-grade assets for sale is increasingly shaping transaction dynamics, making access to quality inventory a key differentiator in the market. Industry experts believe the mismatch between buyer interest and the availability of quality assets is likely to keep outright office transactions focused on select opportunities, particularly in markets such as Bengaluru, Mumbai, Hyderabad, Pune and the National Capital Region, where occupier demand and leasing activity remain strong.Read More News on...moreless