Thought Leadership

Around the world, main streets serve as cultural and economic powerhouses that shape the identities of the cities they anchor. In its 34th year, Cushman & Wakefield’s Main Streets Across the World report confirms the value of main streets worldwide, key economic and social trends shaping their value, and the role they play in crucial global and local business decisions.

A New Era of Main Streets

Despite economic challenges, main streets have shown remarkable resilience as headline rents globally finally surpass prepandemic levels. Retailers continue to target prime locations for their strategic importance and potential for customer attraction, demonstrating their flexibility and strength by adapting to shifting economic conditions and consumer demands. Challenges like rising interest rates and inflation have dampened consumer confidence—yet forecast further rate cuts bring a hopeful outlook for recovery. Retailers are navigating cost pressure challenges while adapting to shifting consumer loyalty trends that demand an omnichannel customer journey, making main street locations increasingly critical arenas for longterm business growth.

The Indian ports sector is witnessing increased private sector participation, particularly by way of Public-Private Partnerships (“PPP”). The government has facilitated private sector participation by adopting investor friendly PPP models and streamlining tender processes and concession agreements for major ports. Due to multiple regulatory authorities and differing practices of port authorities, mergers and acquisitions in the ports sector in India are associated with unique considerations that potential acquirers should bear in mind. This note discusses the key regulatory and contractual considerations relevant to mergers and acquisitions in the ports sector in India.

Aakanksha Joshi

Partner,
S&R Associates

Ameesha Tripathi

Associate,
S&R Associates

Apurv Sharma

Counsel
S&R Associates

Rajat Sethi

Partner
S&R Associates

India’s education sector, forecast to reach a market size of USD 313 billion by FY2029-30, is experiencing rapid growth, driven by a robust economy, burgeoning population and urbanisation, rising per capita incomes, and conducive government policies.

The country’s comprehensive education system is characterised by its scale and breadth, with 1.49 million K-12 schools educating approximately 265 million students. Additionally, its higher education sector is among the largest globally, encompassing nearly 59,000 institutions and enrolling an estimated 43 million students.

As a cornerstone of economic development, India’s education sector has garnered substantial interest from both public and private stakeholders. The government’s commitment to education, as evidenced by the significant budgetary allocation over the years, is expected to foster further growth. Moreover, the sector has witnessed significant foreign direct investment (FDI) equity inflows of USD 9.5 billion since 2000.

While these developments are encouraging, achieving the ambitious objectives outlined in the National Education Policy 2020 necessitates a further strategic increase in budgetary expenditure – a gradual increase in education spending from 2.7% of the country’s GDP in FY2023-24 to the targeted 6% is imperative to ensure the sector’s sustained progress.

Notably, India’s education sector prioritises social good over profit generation, involving a combination of ‘not-for-profit’ activities and ‘for-profit’ administration. Private entities play a significant role by contributing through various business models, encompassing infrastructure and facilities development, strategic investments for expansion, or the provision of management and administrative services.

As the sector grows, there is a corresponding need to strengthen educational infrastructure across the country, presenting significant opportunities for real estate developers and investors.

CBRE India conducted a real estate opportunity assessment to evaluate the additional space requirement of K-12 and higher education institutions that can accommodate the projected growth in student enrolment in India. Our real estate opportunity assessment for India’s education sector indicates an estimated 4+ billion sq. ft. of additional space requirement by 2034-35.

Over the course of 2024, CBRE has been tracking the emergence of a curious phenomenon across the Asia Pacific retail property market.

Despite slower retail sales growth, subdued consumer confidence, and a raft of negative headlines about certain retailers’ weaker-than-expected performance, retailers across a range of categories continue to aggressively seek expansion opportunities; a trend that is pulling down prime vacancy and driving up rents.

This Viewpoint explains the factors driving this trend and provides recommendations to retail landlords and occupiers seeking to chart a course through what is an increasingly complex marketplace.

In the first half of 2024, Asia Pacific’s data center markets reached nearly 12GW in operational capacity, adding 1.3GW of new supply, marking the largest recent increase. Demand matched this growth, signaling healthy market conditions. The region has 4.2GW under construction and 12.0GW in planning, a 2.8GW rise since the end of 2023. The top six markets—Chinese Mainland (4.2GW), Japan (1.4GW), India (1.4GW), Australia (1.2GW), Singapore (0.98GW), and South Korea (0.65GW)—account for 85% of the total capacity. Malaysia (Johor) led in growth with an 80% rise, followed by India at 28%. Both nations also show strong development pipelines. Japan, India, and Australia are seeing increased investment from cloud service providers and colocation players, with their overall capacities projected to reach 4GW or more. Chinese Mainland leads with 6.5GW, while South Korea’s growth remains modest due to regulatory changes. Across the region, policies focus on energy efficiency, innovative technologies, and carbon footprint reduction to support ongoing expansion.

As we navigate the dynamic landscape of India’s commercial real estate market, it is evident that the industry has shown remarkable resilience and growth, even in the wake of global economic challenges. The impressive GDP growth projections for FY 2025 and beyond underscore India’s position as the fastest-growing major economy. This economic vitality is a catalyst for the office space market, driving occupier activity and creating a buoyant environment for growth.

The commercial real estate industry stands at a pivotal juncture, with unique opportunities to realign and reinvent workspaces. Occupiers are now looking beyond basic amenities to focus on employee well-being, and flexible office space operators are well-positioned to meet these evolving demands. The industry’s ability to provide customized, flexible office solutions is increasingly favoured by not just freelancers and startups, but also by medium and large enterprises.

The growth and resilience of India’s office space market is evident from the sustained increase in transactions and the rising share of flex spaces. Flex space operators are expanding in Tier 1 cities and venturing into Tier 2 cities, reflecting the diverse and growing market needs of the occupier landscape.

The industry’s evolution from coworking spaces to managed offices reflects its ability to adapt and thrive in changing business environments. Furthermore, the integration of ESG principles and emerging technologies into operations underscores its commitment to sustainability and operational efficiency. These initiatives not only enhance user experience but also align with the strategic priorities of modern businesses.

Flex space operators are not only ready for the future but are actively shaping it. Investments in technology, ESG initiatives, and flexible offerings position them to meet the demands of today’s discerning occupiers. With India’s robust economic growth and the industry’s innovative approach, the future looks promising.

From ‘Wait and See’ to ‘See the Money’

The real estate sector stands on the edge of a generative AI revolution – one that could unlock up to US$180 billion annually, according to McKinsey. Yet, many are still stuck in the ‘wait and see’ mindset. What’s holding them back? Yardi’s Bernie Devine puts it bluntly: “When it comes to GenAI, it’s time to shrug off the hesitation and start seeing the money.”

Many real estate companies use analytical artificial intelligence to evaluate trends, assess performance, optimise portfolios, manage risks and much more. But generative AI (GenAI) “helps real estate companies to make the leap from predictive to proactive intelligence,” says Bernie, Yardi’s Senior Regional Director for Asia Pacific.

“GenAI doesn’t just analyse the world; it actively shapes it by redefining how we think about problem-solving and creativity,” Bernie says.

What’s stopping real estate companies from adopting the technology at speed and scale? “The same old roadblocks” – concerns about upfront investment costs, uncertainties about existing system integration, knowledge and skills gaps, employee resistance to change, and demand for specialised expertise among them. “Throw in privacy and security concerns, and many real estate companies are taking a ‘wait and see’ approach.”

But the potential productivity uplifts are too big to ignore. Goldman Sachs suggests widespread adoption of GenAI could boost global gross domestic product by 1.3% annually, through labour productivity benefits that free up human resources for higher-value tasks. In developed markets, a 1.5% growth in GDP is within reach.

Given this potential, the question is clear: What should real estate asset managers prioritise next to leverage the transformative power of GenAI? Yardi’s latest whitepaper, Asset Management in the Generative Age, offers some insights.

“GenAI doesn’t just analyse data. It demands decisions, and this influx of choices can lead to decision overload,” Bernie says. Adopting GenAI quickly, therefore, requires a strategic approach. “Start with clean data and robust foundational systems and processes to enhance transparency and trust. Get the data platform and governance right and the benefits will begin to follow.”

While GenAI is a powerful tool, it’s not the only solution. For GenAI to live up to its potential and generate real business value, it must be firmly rooted in trusted enterprise data.

“Sometimes the most effective solution to a problem lies in process change – streamlining workflows, optimising operational procedures or implementing new management practices.

“At other times, the answer might be to bolster education and training, improve communication channels or revisit strategic goals. Whatever the problem, it is better solved in partnership.”

Amid a range of cyclical and structural headwinds, including increased adoption of hybrid working arrangements, a slowdown in global economic growth and elevated interest rates, investor preferences for sectors such as office and logistics have weakened over the past few years. In contrast, fundamentals in the region’s living sector have remained robust, and this has spurred stronger investor interest in multifamily and other living-related asset types.

Since 2019, the living sector has accounted for just 6% of Asia Pacific commercial real estate investment volumes, compared to 44% in the US and 27% in Europe over the same period. This suggests that the development of the living sector is at a relatively nascent stage in Asia Pacific, with plenty of room for growth.

Japan, Australia and mainland China are Asia Pacific’s largest markets in terms of investment volumes in the living sector, while interest is growing in Hong Kong SAR and Singapore, particularly for more niche co-living and student housing subtypes.

There are a number of demand drivers making the living sector ripe for investment: Asia Pacific is home to a diverse landscape of investable residential assets, and the mobile population is generally trending upward over the long term. Challenges around home ownership affordability may push more buyers to the rental market, while rental growth can also provide investors with a hedge against inflation in the long run.

This report explores the investment trends and growth opportunities in the Asia Pacific living sector, and analyses the opportunities and challenges, investment trends and yields, and supply and vacancy metrics in key living sector markets such as Japan, Australia, mainland China, Hong Kong and Singapore.

Conservation shophouses have emerged as one of the top alternative real estate asset class over the past decade in Singapore. Besides their finite supply and vintage charm, they are among the few asset classes in Singapore that allow foreigners and companies to own boutique buildings at a palatable quantum.

Transaction volumes hit a peak of $1.9 bn in 2021 before declining on high financing costs, record price points and most recently, overhang from the $3 bn money laundering case. CBRE Research believes the underlying fundamentals for shophouses remain solid, notwithstanding certain challenges in the near term.

This report looks at the past, present and future for conservation shophouses, and recommends actionable strategies for investors.