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5 Ways to Apply Data Science to Commercial Real Estate in India

The commercial real estate sector in India is on its way to slowly bounce back and recovering in a post-pandemic world. The start of 2022 has unlocked many potentials and scopes of the commercial real estate industry in this country. Increasing demand for appropriate workspaces, commercial properties, and creative concepts in this industry will aid in powerful development. 

With the commercial real estate sector almost returning to its pre-Covid levels, data has become an extremely vital ‘raw material’ of the industry today. Data science has evolved into a separate study thanks to its importance in contributing to the growth of the real estate market. 

Real estate data analytics companies make use of advanced-level analytics and machine learning models to assess information that helps in making better decisions. With its assistance, you can understand consumer behavior, business strategies can be improved, promising market trends can be weighed and any predicted risks can be tactfully averted and dealt with. 

Let’s take a look at how data science can bring about major changes in the commercial real estate sector by helping professionals make well-informed decisions. 

  • Evaluating Data to Estimate Market Trends

Commercial real estate data analytics can assist in predicting property market trends and any risks that might come up in the investment. By using data that comprises a combination of various variables and predictive analysis; it can assess how consumer groups have been behaving over the years, what kind of properties are in demand, the type of leisure activities that consumers like, and how the rent charges have evolved over time. These factors play a huge role in deciding how well or poorly an investment would be able to perform. 

  • Creating the Property Price Indices 

One of the most vital applications of data for commercial real estate is to gather and leverage details connected to the adjoining local areas. Qualitative and quantitative variables play a role in influencing the pricing of commercial properties. Moreover, these elements also work to provide us with a fair idea of which areas might emerge as popular in the future. 

  • Comprehending Performance of Investments 

In the real estate sector, no two properties can be similar. Variables are different even with properties that exist in the same building, not to mention the fluctuating value of properties over time. The evolving rate of an asset, pertaining to the lifecycle and current/future infrastructure, can be traced over the years by making use of data science in this field. 

  • Recognizing & Segregating Leads 

A great way to leverage the power of data science in commercial real estate is to nurture leads. Generally, it is tough for agents to follow up on all the leads that are generated from the many online and offline marketing campaigns. Nevertheless, real estate data providers who have relevant applications and software can provide a ‘seller or buyer score’ to leads that are more likely to sell or purchase properties. This evaluation is made by assessing elements such as demographics, income changes, and buying behavior. 

  • Gauging Profitability of Investment & Construction 

If you’re planning to invest in a commercial real estate space, location intelligence is an extremely significant feature to measure whether the investment would be able to deliver the anticipated profits in the future. Data science in real estate can also prove to be useful to assess environmental conditions so as to finalize a suitable time for the commencement of the construction activities. 

CRE Matrix is India’s best real estate data analytics company that uses data science to help stakeholders across various sectors to assess and compare leasing data and more. 

For more such exciting analysis and details on real estate, visit CRE Matrix.

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5 Major Forces that will Drive Commercial Real Estate Industry in India in 2022

In 2021, there has been a tremendous development in residential and commercial real estate in India. The market was already growing as the requirement for residential apartments and plots rose post nationwide lockdown. The property rates observed a huge increase in demand and prices per square foot.

commercial real estate

Apart from commercial areas that tailor to the daily or weekly needs of the residents, the corporate world has started to convey interest in mounting operations, thanks to enhancements in connectivity and anticipated economic development.

We could witness further liquidity transferred into commercial real estate this year. It is believed that the year 2022 will see a growing surge for appropriate workspaces, freehold commercial and residential properties, and new concepts that will increase returns for investors. 

As we go deeper into 2022, here are a couple of forces that will push the commercial real estate industry in India.

Residential Property Market is Expected to Rise

After an extended duration of dropping and then stabilizing, residential property rates are possibly expected to begin rising again. Approximately 5% capital value growth has been estimated for the residential property segment in India in 2022. 

Several of the supply and demand-side factors are taken into consideration and evaluated over the last decade. This drive is projected to continue in 2022 as potential homebuyers’ preferences for larger residences, improved facilities, and lucrative pricing will help seal the deals. 

Foreign Investment is Estimated to Push this Sector

Foreign Direct Investments (FDI) will continue to be a significant development driver, and the same is valid in the case of the real estate players as well. Indian real estate has managed to draw a huge amount of foreign moolah, particularly in the residential market. With RERA assuring transparency and laws permitting 100% FDI in construction, Indian real estate is observing pointed investment infusions from NRIs. 

Property Rates Projected to Rise

In 2020, approximately 1.38 lakh housing units were sold. When you pit it against the previous peak in 2014, this was considered to be a rock bottom of 60%. Nevertheless, between January and September 2021, 1.45 lakh units were sold. There was a 5% surge in sales in 2020. 

Increase in Demand for Co-working Spaces

In 2020, there was significant growth in office closures and a swift shift in ubiquitous remote employment globally. This trend carried on in 2021. However, as the vaccines started rolling out, people slowly returned to their workplaces. Thanks to the pandemic, firms have had to spend time and money investing in digital abilities to let employees work from home. 

Businesses are seeking new working approaches while allowing workplace flexibility to make sure that profitability balances well with employee well-being. The most obvious development has been the surge of a hybrid workforce across an array of workspace choices, including flexible offices. 

Growing Demand for Data Centers

The massive digital push generated by the COVID-19 pandemic has been lucrative for data centers which could still offer an approximate 15% rental yield. Firms started to modify their digital infrastructure to cater to the new work environment instantly after India went into lockdown due to the pandemic, thereby leading to a 25-35% increase in data center capacity. 

The year 2022 is also believed to observe an increase in SCO (shop-cum-office-space) concept development. These SCO plots will assist entrepreneurs to develop their business concepts by owning a commercial space at moderately placed prices with advanced amenities. Sharp investors can witness the benefits of a well-equipped setting that backs retail or office in a favorable market. Mixed-use commercial spaces will help investors in expanding their risk in the investment portfolio by making the most of the new evolving idea. 

For more CRE industry insights and data research do Contact us.