What is   3   x   6   ?

      Understanding the ROI of High-End Commercial Spaces

      By SQUAREA Knowledge Hub

      Published: May 22, 2025

      In today’s commercial real estate environment, return on investment is defined by more than just rental yield. It reflects a deeper calculus, one that accounts for asset grade, lease structure, tenant quality, and long-term resilience. As institutional capital becomes more selective and compliance benchmarks tighten, high-end commercial spaces have emerged as the most credible vehicles for durable, risk-mitigated growth.

      For investors seeking stable income, long-term value preservation, and institutional-grade performance, high-end commercial real estate has become a core component of performance-led portfolios. As the fundamentals of ROI become more layered, it is essential to break down the individual factors that shape returns in high-end commercial assets.

      What Drives ROI in Commercial Real Estate?

      The ROI of a commercial property is a product of several interlinked variables. Some of the core indicators include:

      • Escalation clauses: Structured rent growth over time
      • Vacancy risk: Downtime between leases and tenant turnover
      • Exit potential: Resale value and REIT-readiness
      • Rental yield: Recurring income relative to capital invested

      According to Business Standard, commercial office assets in India offer yields of 5-7%, significantly outperforming residential properties, which hover around 3%. This spread forms the baseline of return, but in high-end office spaces, ROI is built on much more than yield. The next layer of ROI is influenced by the quality and grade of the asset, and this is where ‘relevant-grade’ commercial spaces emerge as clear outperformers.

      The Role of Asset Grade in Return Potential

      Over the last few years, a new benchmark has come to define premium commercial assets, relevant-grade. These are not just modern offices, they are future-ready spaces that exceed standard Grade-A specifications on every front. According to JLL, as of H1 2024, India’s top seven cities had approximately 465 million sq. ft of relevant-grade stock, forming 56.3% of the total Grade-A inventory. These properties command a 19.8% premium, with average rents at ₹92.4 per sq. ft/month, a clear indicator that occupiers value quality and are willing to pay for it.

      What sets relevant-grade buildings apart:

      • Smart systems: Digital access, energy-efficient HVAC, and building automation
      • Sustainability: LEED or IGBC certification, water and waste management
      • Efficient design:Flexible layouts, better ventilation, and employee-first planning
      • Integrated ecosystems:Cafeterias, wellness zones, EV stations, and flex work areas

      Along with asset grades, the structure of tenancy and income continuity are equally decisive in realising long-term ROI.

      Lease Structures and Tenant Quality: The Hidden Engines of ROI

      Premium commercial spaces are defined not only by where they are or how they look, but who occupies them and under what terms. In high-grade assets, tenants are typically from IT, BFSI, global consulting, or GCC sectors. These organisations:

      • Enter into longer lease agreements, ensuring prolonged income visibility
      • Undertake significant capital outlay on interiors and fit-outs, increasing lease stickiness
      • Require a scalable, compliance-ready infrastructure that aligns with global operational standards

      For investors, this translates into several advantages:

      • Predictable income growth through pre-agreed rent escalations built into multi-year lease contracts
      • Low vacancy exposure, driven by long-term tenant commitment and limited churn
      • High tenant retention, ensuring continuity of cash flow with minimal downtime between leases

      These factors also make relevant-grade leased assets REIT-compatible, offering greater liquidity and exit potential, an increasingly important consideration for private and institutional investors alike.

      With the fundamentals of quality and tenancy firmly aligned, the final piece of the ROI equation is timing, and 2025 stands out as a defining entry point.

      Why 2025 Is a Strategic Entry Point for Investors

      India’s commercial office sector is undergoing a structural shift. ESG benchmarks, design innovation, and tenant expectations are converging to define a new era of real estate development. And 2025 presents a timely opportunity to enter high-grade commercial markets.

      Here’s why:

      • Developers are launching strata-sale and lease-ready assets across top urban corridors
      • Demand from sectors like Global Capability Centres, flex workspaces, and BFSI continues to rise
      • Global tenants are aligning portfolios to ESG-compliant infrastructure, making relevant-grade the default standard

      This shift is also reflected in the nature of upcoming inventory. Projects such as the upcoming Trump World Center in Pune, a 1.6 million sq. ft branded commercial development is offering both for-sale and leased formats (TOI). It reflects the growing alignment between global investment preferences and India’s evolving commercial inventory.

      With future supply increasingly focused on relevant-grade, ESG-aligned assets, investors who enter the market at this stage are well-positioned to capitalise on a cycle defined by resilient income, sustained occupier demand, and long-term value creation.

      At SQUAREA, we help you align your capital with future-ready commercial assets that are graded for performance. Whether your goal is to acquire leased institutional assets, invest in premium strata offices, or explore ESG-compliant office campuses, we provide tailored investment access backed by in-depth research, location strategy, and asset due diligence.

      Connect with us at hello@squarea.io or call us at +91 90 9641 9641 to unlock the ROI of high-end commercial real estate – strategically, securely, and successfully.


      Tags

      Other Stories

      5 June 2025
      The Greener the Building, the Stronger the Asset: How Sustainability is Reshaping Real Estate in India

      As climate pressures intensify and capital becomes more discerning, the real estate sector stands at a pivotal moment. No longer are sustainability credentials a value-add—they are fast becoming core to asset valuation, tenant attraction, and long-term resilience.

      This World Environment Day, the spotlight is on real estate’s role in delivering decarbonization at scale. According to the International Energy Agency’s 2024 Global Buildings Tracker, buildings now account for 37% of energy and process-related CO₂ emissions worldwide. In India, where urbanization is accelerating, this figure underscores a critical truth: real estate can either amplify the climate crisis or actively mitigate it.

      A shift is underway. What was once an ESG narrative led by compliance is now an investment imperative. The World Green Building Council’s 2024 Global Trends report reveals that green-certified buildings reduce operating costs by up to 14%, with rental premiums of 6–10% in Indian metros. Institutional investors are taking note. CBRE India’s 2024 Green Real Estate Outlook reports that 72% of investors now factor ESG ratings into acquisition strategies, and 63% of occupiers require green certifications for office space selection.

      In Pune, one of India’s fastest-growing real estate markets, this transition is visible across asset classes. Premium residential projects like YOO Pune and YOO Villas, developed in collaboration with global design house YOO, have integrated sustainability into their architectural language. From passive solar design and energy-efficient systems to 5-acre rainforest and rainwater harvesting, these developments aren’t just aesthetic statements—they’re engineered for performance.

      On the commercial front, buildings like EON IT Park, World Trade Center Pune, and Amanora Chambers have embraced LEED and IGBC ratings, focusing on air quality, daylight access, and reduced water usage. This isn’t just about being green—it’s about future-proofing assets for institutional-grade returns.

      Even in new commercial development, the sustainability playbook is being executed with intent. Upcoming Grade-A developments, including Omicron Business Landmarks Kharadi NX, are integrating features like high-efficiency HVAC systems, daylight-responsive lighting, and climate-conscious landscaping. These aren’t superficial add-ons—they’re fundamental to asset longevity and lifecycle value.

      What’s also changing is the role of landscape. No longer ornamental, green spaces are being engineered for thermal comfort, carbon sequestration, and even stormwater management. Think shaded public courts, rooftop rain gardens, vertical green walls—solutions that serve both people and planet, while also reducing long-term energy intensity.

      The financial rationale for all this is clear. According to Knight Frank India’s 2024 ESG Report, commercial green buildings in India experience lower vacancy risks and up to 7% higher yields than non-certified assets. With REITs and institutional funds allocating more capital toward ESG-aligned portfolios, green buildings are quickly becoming the safer, smarter bet.

      At the intersection of real estate and climate action, sustainability is now a proxy for value. It de-risks assets, meets rising regulatory standards, and aligns with stakeholder expectations—from tenants and investors to city planners and financiers.

      As the built environment redefines its role in climate strategy, developers who integrate sustainability from day one aren’t just responding to a trend—they’re shaping the blueprint for future cities.

      4 June 2025
      Work Meets Wellness: Rise of Health-focused Commercial Projects

      India’s commercial real estate sector is undergoing a quiet but powerful shift. While demand for Grade-A buildings, sustainable supply, and infrastructure-led locations continues, there’s a parallel priority that is becoming non-negotiable - Wellness. No longer a soft perk or a branding exercise, wellness is fast becoming the core lens through which commercial spaces are being designed, leased, and marketed.

      As India’s commercial real estate market races towards a projected size of USD 106.05 billion by 2029, growing at a CAGR of 21.10% (Puravankara), this rising wave of wellness-centric workplaces signals not just a trend, but a transformation in how occupiers and investors define long-term value. To understand the emergence of wellness as a strategic priority, it is imperative to first identify the market forces and occupier expectations driving this shift.

      What’s Driving This Transformation?

      The shift toward wellness-driven commercial spaces is not incidental. It is anchored in three powerful macro and behavioural changes.

      • Talent retention has become workspace-led: Post-pandemic realities have recalibrated employee expectations. Natural light, air quality, biophilic design, and ergonomic layouts are now baseline requirements, not bonuses. Wellness impacts productivity, and companies know it.
      • Occupier expectations have evolved: Post-pandemic realities have recalibrated employee expectations. Natural light, air quality, biophilic design, and ergonomic layouts are now baseline requirements, not bonuses. Wellness impacts productivity, and companies know it.
      • Institutional investment is aligning with wellness metrics: Global funds evaluating Indian commercial assets are now using wellness certifications alongside green ratings like LEED and IGBC. This adds a new filter to asset valuation and lease potential.

      These evolving priorities are altering how commercial assets are evaluated. As wellness moves to the forefront, it becomes essential to define what truly sets a health-focused workplace apart from conventional developments.

      What Defines a Wellness-Focused Workplace?

      Wellness-focused commercial projects go beyond traditional aesthetics or green landscaping. They are built around human-centric principles with measurable impact on health, comfort, and performance. Wellness-focused workplaces include:

      • Air, light, and acoustics: Integration of advanced HVAC systems, daylight-maximising facades, and noise insulation contribute directly to cognitive performance and wellbeing.
      • Biophilic and restorative design From indoor green zones and nature-inspired textures to meditation rooms and wellness terraces, design is aligned with stress reduction and mental rejuvenation.
      • Activity and movement: Fitness centres, walking tracks, active staircases, and cycle-to-work infrastructure are integrated to encourage daily physical activity within the workday.
      • Food and hydration access: On-site cafes serving clean, seasonal options and smart hydration stations reinforce the health ecosystem.
      • Certifications: Projects pursuing LEED, WELL, IGBC Health and Well-being ratings show measurable commitment to global benchmarks in health-driven design.

      These features go beyond design, they directly address what today’s occupiers expect and can lead to measurable returns. It is important to assess how wellness integration is influencing both asset performance and tenant experience.

      Key Benefits for Occupiers and Investors

      The integration of wellness is not just a peripheral upgrade, it is emerging as a key performance driver for commercial real estate assets. Across markets, wellness-certified developments are demonstrating stronger leasing traction, longer tenant retention, and higher investor confidence (Business Standard).

      • Improved productivity and retention: Studies show that wellness-certified buildings enhance occupant satisfaction and performance, reducing attrition and absenteeism.
      • Premium leasing and longer lock-ins: Tenants are willing to pay a premium for wellness-certified campuses that support long-term employee engagement and brand positioning (Knight Frank).
      • Future-ready investments: As ESG reporting and corporate wellness strategies go mainstream, assets without wellness integration are likely to face rental stagnation.
      • Higher absorption across sectors: BFSI, IT, and GCCs are prioritising wellness. This is increasing the leasing velocity for such developments and boosting investor confidence.

      With the performance advantages clearly established, wellness is no longer positioned as an optional add-on. The next phase of market evolution will see it embedded into core real estate strategy, both as a competitive differentiator and a resilience-building lever.

      This redefinition is particularly relevant in a high-growth market like India. As the sector moves toward a USD 106 billion valuation by 2029, wellness-focused assets are expected to lead on rental premiums and become central to institutional investment strategies.

      At SQUAREA, we identify and enable access to India’s most forward-looking commercial assets, projects that integrate wellness, ESG, and grade relevance to deliver future-ready performance. To explore wellness-aligned commercial investments that meet global benchmarks and rising tenant expectations, write to us at hello@squarea.io or call +91 90 9641 9641. Let’s align your portfolio with the next chapter of workplace evolution!

      4 June 2025
      Philippe Starck to Armani: Exploring the World’s Top Branded Real Estate Designers

      In today’s ultra-luxury real estate landscape, it’s not just the location that defines value, it’s the designer behind the door. From haute couture to high design, the world’s most celebrated creative minds are now reshaping how the wealthy live, invest, and experience space.

      Branded residences, featuring names like Philippe Starck, Giorgio Armani, Missoni, and Fendi, are no longer niche indulgences. They are aspirational, globally aligned investments where design, service, and scarcity intersect. These homes promise more than just aesthetics, they offer a lifestyle that mirrors the sophistication of their creators. Globally, the appetite for such curated luxury is accelerating and is fast becoming the benchmark for luxury real estate.

      The Rise Of Design-Driven Branded Residences

      High-net-worth individuals (HNWIs) and ultra-high-net-worth individuals (UHNWIs) today are more discerning. For them, the brand story, design integrity, and curated experience hold centre stage. This has propelled the rise of branded homes.

      Across the globe, over 105,000 branded residential units are spread across 750 projects. By 2027, this number is expected to grow by nearly 60% to 1,200 developments, driven by rising demand for curated luxury living (Noesis Capital Advisors). This surge is not just about expansion, it reflects a shift in how design-led living is influencing long-term investment thinking.

      Here’s what makes these branded homes so compelling today:

      • Curated living: Homes come fully managed, with concierge, wellness, and hospitality built-in
      • Global recognition: The brand ensures international appeal and liquidity
      • Performance resilience:Even in emerging markets, branded homes tend to hold better value

      These homes command nearly a 30% markup compared to non-branded peers, underlining the significant pricing power and investment confidence they attract (Savills). This growing preference is not rooted in aesthetics alone, it reflects a deeper alignment with the design language and brand philosophy of globally celebrated creators. It is this creative influence that is now shaping the most iconic residential addresses worldwide.

      Exploring Global Icons Who Are Shaping Branded Residences

      From London to Dubai to Miami, these designers have set benchmarks in how art, design, and living come together under one roof.

      • Philippe Starck - Yoopune, India
      • Starck brought a distinct design sensibility to Yoopune, blending modern interiors with landscaped open spaces. His philosophy of design continues to influence branded residential designs in India across Pune and Bhubaneswar.

      • Giorgio Armani - Armani Residences, Burj Khalifa
      • A masterclass in understated glamour, Armani's influence can be seen in the clean lines, neutral palettes, and meticulous detailing that transform these residences into timeless sanctuaries.

      • Missoni - Missoni Baia, Miami
      • Celebrating colour, pattern, and fashion-forward elegance, Missoni’s Miami project redefines waterfront luxury through a distinctly Italian lens.

      • Fendi - Fendi Château Residences, Miami
      • These residences reflect sophistication, with every interior element crafted to echo the brand’s Roman heritage and artisanal finesse.

      • Mandarin Oriental - One Hyde Park, London
      • One of the most prestigious addresses globally, this project combines cutting-edge architecture with Mandarin Oriental service, creating an unrivalled luxury benchmark in urban living.

      • Bulgari - Bulgari Residences, Dubai
      • Located on Jumeirah Bay Island, these homes integrate Italian design tradition with Middle Eastern opulence, curated by the Bulgari brand and offering private marina access.

      • Ritz-Carlton - The Residences at NoMad, New York
      • In the heart of Manhattan, these residences bring the hospitality giant’s legendary service into full-time ownership, appealing to global citizens who seek familiarity in high-touch living.

        This global momentum is no longer confined to traditional luxury hubs. India is emerging as a compelling destination in the branded real estate landscape, backed by rising affluence, global brand entries, and evolving investor priorities.

      India's Place In The Global Branded Landscape

      While India currently holds just 3% of the global branded residences market, it is poised for significant expansion. As per Noesis Capital Advisors, the number of branded residential projects in India is expected to grow significantly in the near future. This momentum is driven by a new generation of HNIs and UHNIs who view luxury real estate as a strategic tool for wealth preservation and global alignment

      While this growth is pan-India, some regions have emerged as frontrunners in adopting and shaping the branded residence landscape:

      Established branded residence markets in India

      • Mumbai and Delhi NCR: These cities have long been the nucleus of India’s branded real estate footprint, anchored by developments like The Trump Towers. They continue to attract steady demand due to their mature buyer base, prime land, and high asset retention

      Emerging hubs of branded homes in India

      • Pune: With projects like YOO, Pune by Philippe Starck and Trump Towers, Pune has demonstrated early adoption of branded living. Its growing base of first-generation entrepreneurs and global CXOs has made it an ideal second-tier hotspot with long-term capital appreciation potential.
      • Bhubaneswar: DN YOO Odisha, a collaboration between DN Homes and YOO (co-founded by Philippe Starck), is introducing branded living to Eastern India for the first time. Positioned as a high-design offering in a growing economic zone, it signals the decentralisation of India’s luxury housing narrative.

      From Starck to Armani, today’s most influential designers are redefining the global luxury real estate landscape. At SQUAREA, we specialise in identifying branded residences where design excellence is matched by long-term investment merit. Whether you’re securing a signature address in Mumbai or entering an emerging market like Bhubaneswar, our advisory-led approach ensures each acquisition aligns with your financial vision and portfolio goals.

      To explore India’s and Dubai’s most compelling branded residences shaped by the world’s top designers, reach out to us at hello@squarea.io or call
      +91 90 9641 9641.