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Revitalizing outdated buildings: A requisite to avoid redundancy

September 24, 2021 1818 0 Emerging Tech

Revitalizing outdated buildings:  A requisite to avoid redundancy

As per Colliers' latest report, there is tremendous scope to upgrade around 100 million sq ft of office space and the retrofitting opportunity is worth Rs 9,000 crore across the top six cities.

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Retrofitting outdated office stock holds investment potential of INR9,000 crore

Scope to upgrade 100 mn sq ft of office stock across top 6 cities  

Gurugram, 23 September 2021 Landlords and developers are missing investment opportunities and have a scope to upgrade around 100 million sq ft of office space. The retrofitting of these assets has Rs 9,000crore or USD 1.2 billion worth of unrealised value in the top six cities as per Colliers’ latest report, Revitalizing outdated buildings: A requisite. 

As per the report, the upgradation of buildings will make them more investible, which investors and developers can then bundle into a REIT. Currently, investors are betting on under-construction buildings due to a lack of readily investible assets.

“This is an opportune time for landlords to upgrade their properties. Many occupiers are considering moving from old-generation to new-generation buildings and, more than ever before, looking at aspects like HVAC upgrades, improved indoor air quality standards and smart features. The focus is also on modern amenities which improve operational efficiency and enable collaboration. Occupiers are also looking at a reduced CAPEX from their side. In this context, retrofitting buildings will revive demand by generating a renewed sense of interest among occupiers. While up-gradation can involve increased costs, landlords can see the rental appreciation of up to 20%,” said Ramesh Nair, Chief Executive Officer | India & Managing Director, Market Development, at Colliers India.

The report mentioned that Occupiers’ needs, and preferences are changing. This makes it imperative for outdated office buildings to be upgraded. Occupiers are increasingly exploring smart buildings with modern amenities that improve operational efficiency and enable collaboration. Moreover, COVID-19 has brought the health and safety of employees to the centre stage. As employees gradually return to the workplace, workspaces will need to meet the expectations of the new normal.

According to Colliers, CBDs of the top Indian cities such as Nariman Point in Mumbai, Connaught Place in Delhi, and MG Road in Bengaluru are iconic. They have played an enormous role in the growth of these cities. However, about 60% of the total CBD stock of the top six towns require upgradation. Tapping into this potential will be a good investment opportunity for developers and investors.

Bengaluru, Delhi-NCR and Mumbai together account for about 75% of the total stock ready for upgradation. Mumbai has the highest potential, with 28 mn sq ft of obsolete inventory. In the NCR, Delhi leads for upgradation in the CBD, Nehru Place and Okhla micro-markets where up to 49% of the stock is outdated.


“Energy retrofitting, technology integration and design are some vital elements for retrofitting. Tech-enabled air distribution systems, innovative glass technology, double glazing to cut energy requirements are some essential aspects that landlords can look into while retrofitting. Well-being focused design elements like increased natural lighting and ventilation, and occupiers will increasingly prefer integrated outdoor spaces, says Argenio Antao, Chief Operating Officer, India. 

The report mentioned, upgrading these buildings with modern amenities, designs, and building technology will not only attract massive investment opportunities but also command higher rentals and global companies. Occupiers will also be inclined towards upgraded buildings further led by the prominence of location, robust public transport, and low new supply in these markets. 


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Colliers India
Sukanya Dasgupta, Head Marketing and Communications - sukanya.dasgupta@colliers.com

Colliers (NASDAQ, TSX: CIGI) is a leading diversified professional services and investment management company. With operations in 66 countries, our 18,000 enterprising professionals work collaboratively to provide expert real estate and investment advice to clients. For more than 28 years, our experienced leadership with significant inside ownership has delivered compound annual investment returns of approximately 20% for shareholders. With annual revenues of $4.5 billion and $98 billion of assets under management, Colliers maximizes the potential of property and real assets to accelerate the success of our clients, our investors, and our people. Learn more at corporate.colliers.com, Twitter @Colliers or LinkedIn.



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