Commercial Offices and Leasing

How developers build office parks to lease to IT firms and global capability centres, earning steady rent, and how REITs let them recycle capital.

Some developers build offices to lease.

Demand

IT firms and global capability centres (GCCs) lease large office spaces in Bengaluru, Hyderabad, Pune and others.
Flexible workspace operators also lease.

Business model

Developers earn rent over many years, unlike one-time home sales.
Leases often have annual escalations.

REITs

Developers can sell completed offices to REITs, recycling money into new projects. Embassy Office Parks listed India’s first REIT in 2019.

Risks

Work from home after 2020 raised vacancy fears, though leasing later recovered strongly.
Tenant concentration.

The tech park

A developer builds a tech park in Hyderabad, leases it to a GCC and later sells it to a REIT to fund its next project.

Thinking developers only sell homes

Many earn rent from offices.

Key takeaways

IT firms and GCCs drive office demand.
Leasing earns steady rent.
REITs recycle developers' capital.
Work from home was a temporary scare.