With the future prospects for India’s office market looking highly promising and the India Office real estate market projected to grow from USD 33.41 billion in 2024 to USD 117.04 billion by 2029, at a CAGR of 28.5%, the commercial real estate is poised for a major shift. As businesses and investors increasingly seek to benefit from this expanding market, Shop-Cum-Offices (SCOs), combining retail and office environments into single cohesive space, are emerging as a game-changing trend.
Mohit Goel, Managing Director, Omaxe Group, says, “Eyes of investors and end-users have increasingly turned towards SCOs due to their suitability for a wide range of businesses. In the last two to three years, its popularity has grown immensely, and it has come to be at the forefront of commercial real estate development. Even though most of NCR has witnessed a spike in SCO development, Faridabad has emerged as one of the few areas offering relatively low entry costs and high ROI.
“The situation has specifically transformed after the rapid construction of the Manjhawali Bridge, which connects the city with Jewar Airport. SCOs are the future, and every suave investor should actively consider having them in their portfolio.”
The appeal of SCOs lies in their ability to cater to a diverse range of businesses, from retail stores and offices to healthcare centres and fitness hubs. This versatility, combined with relatively low entry costs and high rental yields of 9-10%, has made SCOs an attractive investment option for developers and investors alike. Moreover, the potential for capital appreciation is substantial, with prices of SCOs having appreciated by 350% to 450% between 2011 and 2020.
The absorption rate has also risen by 25% in recent years. Much of this demand is driven by small and medium enterprises (SMEs) and startups seeking business solutions that SCOs offer. In Gurugram alone, 71.6 acres of land have been developed for SCOs over the past two years, with the segment expanding annually at a rate of 30% to 40%.
Several SCO projects have been successfully operationalised in the NCR and is contributing to the region’s booming commercial real estate market. Notable examples include Gaurs Aero Mall in Ghaziabad, Gaurs World Smartstreet, and Gaurs City Center in Greater Noida West, developed by Gaurs Group. These projects exemplify the potential of SCOs to provide high returns on investment while catering to the needs of modern businesses.
Manoj Gaur, Chairman, CREDAI National and CMD Gaurs Group, points out, “In recent years, SCOs have gained significant traction, particularly in the National Capital Region (NCR) because of its efficiency. These hybrid structures seamlessly blend retail, office spaces, recreational facilities, and food zones, meeting the modern demand for convenience and multi-functionality. Gaurs Group has made significant strides in the development of this segment at our commercial projects in Gr Noida West and at Gaur Yamuna City on Yamuna Expressway. SCOs not only offer prime retail and office spaces but also cater to a wide range of businesses, making them highly sought-after investments.”
Rohit K Khosla, Director, Axiom plus services llp, adds, “The Haryana government’s scheme allowing developers to sell plots where buyers can construct up to four floors for office or retail use has further boosted the lure of SCOs. Sector 114 in Gurugram, for instance, is emerging as a prime destination for SCO development. The flexibility in building plans and customisations, combined with the strategic location, makes Sector 114 a hotspot for SCOs, offering high returns on investment and a promising future for businesses.”
As India’s office real estate market continues to grow, SCOs have emerged as the next big thing in combining retail and office environments. With their ability to provide convenience, versatility, and high returns on investment, SCOs offer a unique opportunity for businesses and investors alike. As more projects are developed across the NCR, the SCO segment is set to play a pivotal role in shaping the future of commercial real estate in India.