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The commercial real estate market size is estimated to grow by USD 384.46 billion at a CAGR of 4.36% between 2023 and 2028. Market growth hinges on several pivotal factors: the expanding global commercial sector, increasing aggregate private investment, and a surge in e-commerce spending. The commercial sector's global expansion drives demand for various goods and services, stimulating market growth across diverse industries. Concurrently, rising aggregate private investment fuels economic growth by fostering business development and infrastructure projects, thereby expanding market opportunities. Furthermore, the rapid increase in e-commerce spending reflects changing consumer behavior towards online shopping, prompting businesses to enhance their digital presence and logistics capabilities. These factors collectively contribute to market expansion by fostering innovation, enhancing competitiveness, and meeting evolving consumer demands globally. As businesses adapt to digital transformations and capitalize on expanding commercial and investment opportunities, the market is poised for significant growth, driven by the convergence of global economic trends and digital commerce advancements. The market forecasting report provides market size, historical data spanning from 2018 to 2022, and future projections, all presented in terms of value in USD billion for each of the mentioned segments.
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The market is experiencing significant transformations driven by trends such as Smart Cities, GST, and foreign direct investments (FDI). There is a notable rise in commercial real estate, particularly in Smart City projects and industrial and logistics sectors, reflecting a shift towards workplaces of the future and boutique businesses. With the advent of GST, business owners are reevaluating their real estate consultancy needs, seeking efficient spaces that align with Smart Cities Mission objectives. The demand extends to multifamily and conventional offices, where real estate developers are adapting to accommodate evolving workplace dynamics. This evolution underscores the importance of strategic location and infrastructure investments to attract FDI and enhance commercial property values in urban centers.
Interest rates serve as a pivotal driver in the property market, influencing various facets of the industry. As rates fluctuate, leasing and transactions respond accordingly, impacting costs and the overall market landscape. The housing market's performance directly influences commercial estate, with location, vacancy rates, and supply playing crucial roles. Brokers and tenants navigate these shifts, aligning portfolio strategies with market dynamics.
Further, employee preferences for remote work and changing supply-demand dynamics may result in a slowdown, emphasizing the need for adaptable strategies. The interconnected nature of real estate markets underscores the importance of monitoring interest rates as a key determinant of industry trends and outcomes.
Increasing marketing initiatives is an emerging trend shaping market growth. Several companies in the global market are deploying the integrated marketing communication strategy by leveraging communication channels such as newspapers, magazines, and social media to sell their products. Many vendors create TV advertisement campaigns followed by a marketing campaign that includes Internet pre-roll, a wide-reaching social media and blogging program, and an interactive website.
Moreover, companies also use social media channels such as Instagram to showcase ideas on using the company products for education and play. They post a variety of creative content on their Instagram channel with a focus on attracting customers. Hence, increasing marketing initiatives is a growing trend, which is expected to drive market growth and trends during the forecast period.
Rising emphasis on remote work and online shopping is a significant challenge hindering market growth. Advancements in technology and changes in consumer habits such as the rise of online shopping, have led to a decrease in the demand for traditional retail spaces. As more people shop online, foot traffic in traditional brick-and-mortar retail stores has declined. Similarly, remote work trends have impacted the need for office space. With a rising emphasis on remote work, flexible office layouts, and the incorporation of cutting-edge technology such as virtual reality, businesses are reinventing their operational paradigms.
However, businesses are changing due to the need for co-working spaces, flexible workspaces, and virtual collaboration technologies. This affects the way commercial assets are leased and used. Thus, increased focus on online shopping and remote work can become a major challenge, which will hamper the growth of the market during the forecast period.
The market research and growth report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the market growth and forecasting report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.
Customer Landscape
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
The research report also includes detailed analyses of the competitive landscape of the market and information about 20 market companies, including:
Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
The offices segment is estimated to witness significant growth during the forecast period. The dynamic rise of the offices segment in the market is being fueled by changing work practices and corporate requirements. The need for office space is impacted by the emergence of flexible work arrangements, hybrid models, and rising technological use.
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The offices segment was the largest and was valued at USD 462.65 billion in 2018. To draw and keep talent, businesses are placing a high value on contemporary, adaptable, and technologically advanced workspaces. Co-working places such as Regus and WeWork, which offer flexible office solutions, are notable examples. Furthermore, significant companies such as Google and Amazon are spending money on creative office layouts that encourage teamwork and worker happiness. The offices end-user segment is expected to grow between 2024 and 2028, which is indicative of the continual change in workspaces to conform to modern business practices. This development presents possibilities, as well as challenges for the market, thereby exposing it to moderate growth during the forecast period.
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APAC is estimated to contribute 44% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period. The market in APAC is witnessing growth, mainly due to the growth in the industrial sector, which has led to an increase in the demand for commercial office spaces. China, Japan, India, South Korea, and Singapore are the main revenue-contributing countries in APAC for this category. The market has been experiencing rapid development across various countries in APAC. For instance, India has been experiencing significant growth in the commercial construction sector, followed by China, Vietnam, and other emerging Asian economies.
Moreover, Thailand, the Philippines, Laos, and Singapore are witnessing moderate growth in the construction of commercial spaces. The increasing construction of commercial spaces in these countries will boost the growth of the market. Furthermore, higher disposable incomes and changing lifestyles in these countries inspire consumers to invest highly in commercial projects, which is driving the real estate industry. Therefore, the market in APAC is anticipated to experience high growth during the forecast period.
The market research report provides comprehensive data (region wise segment analysis), with forecasts and estimates in "USD billion" for the period 2024 to 2028, as well as historical data from 2018 to 2022 for the following segments.
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The market is evolving rapidly with advancements in technology development, including virtual property tours, artificial intelligence, and data analytics shaping the sector. Factors such as a stable economic environment and initiatives like the Vaccine campaign are bolstering confidence among investors and developers alike. The Real Estate Regulatory Authority plays a crucial role in ensuring transparency and accountability in transactions, particularly in the retail and hospitality sectors. The rise of co-working space and flex space centers caters to the needs of start-ups and information technology firms looking for agile workplace solutions. In the manufacturing and engineering sectors, demand for future workplaces is driving innovation in commercial real estate design and functionality. This dynamic landscape reflects the resilience and adaptability of the Indian real estate market amidst changing business landscapes and evolving consumer preferences in hospitality and the retail segment.
Market Scope |
|
Report Coverage |
Details |
Page number |
167 |
Base year |
2023 |
Historic period |
2018-2022 |
Forecast period |
2024-2028 |
Growth momentum & CAGR |
Accelerate at a CAGR of 4.36% |
Market Growth 2024-2028 |
USD 384.46 billion |
Market structure |
Fragmented |
YoY growth 2023-2024(%) |
4.01 |
Regional analysis |
APAC, North America, Europe, South America, and Middle East and Africa |
Performing market contribution |
APAC at 44% |
Key countries |
US, China, Japan, Germany, and UK |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
Atlas Technical Consultants LLC, Boston Commercial Properties Inc., Brookfield Business Partners LP, CBRE Group Inc., Dalian Wanda Group, DLF Ltd., Keller Williams Realty Inc., Lee and Associates Licensing and Administration Co. LP, Link Asset Management Ltd., MARCUS and MILLICHAP Inc., MaxWell Realty Canada, NAI Global, Nakheel PJSC, Onni Contracting Ltd., Prologis Inc., RAK Properties PJSC, Segro Plc, Shannon Waltchack, TCN Worldwide, and WeWork Inc. |
Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, Market condition analysis for the market forecast period |
Customization purview |
If our market report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
We can help! Our analysts can customize this market research report to meet your requirements.
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by End-user
7 Market Segmentation by Channel
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
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