Shop-Cum-Offices (SCOs), the hybrid spaces that integrate both retail and office, are becoming a game-changer in India’s commercial real estate sector as it offers a unique blend of retail and office functionalities that are transforming the market landscape.
This innovative design caters to the needs of modern businesses by combining the operational benefits of office spaces with the customer engagement advantages of retail spaces. SCOs are particularly advantageous in densely populated urban areas where real estate is both limited and costly.
The demand for SCOs is surging due to their versatility and potential for high returns. As reported by the Financial Express, investors are increasingly interested in SCOs as they offer a unique investment opportunity compared to traditional office buildings or shopping malls. These spaces not only meet the needs of diverse businesses but also provide stable and profitable returns.
Key SCO Projects
DLF
India’s leading real estate developer, DLF, has reported impressive SCO sales totaling approximately Rs 1,150 crore for the fiscal year 2023-24. DLF’s entry into the SCO segment began with the launch of Gardencity Central in Gurugram in late 2021. Since then, DLF has expanded its SCO portfolio to include Central 67, Arcade 68, SCO 84 Gardencity Central, and Valley Central in Panchkula.
According to Aakash Ohri, Joint Managing Director and Chief Business Officer at DLF Ltd., the growing popularity of SCOs is driven by their blend of retail and office functionalities. SCOs are reshaping urban spaces and moving beyond traditional commercial developments.
Paras Buildtech
Paras Arcade 114 in Gurugram is a notable project by Paras Buildtech, spanning 3.25 acres. It features a range of SCO plots from 104 to 143 square meters. Kunal Rishi, COO of Paras Buildtech, highlighted a 25% increase in absorption rates for SCOs, driven by their adaptability and economic viability. The rise in demand for SCOs is particularly evident in regions like Dwarka Expressway, which has seen significant infrastructure development and enhanced connectivity.
Royal Green Realty
New SCO spaces introduced by Royal Green Realty in Bahadurgarh are designed to offer affordable solutions and enhanced convenience for businesses. Yashank Wason, Managing Director of Royal Green Realty, noted that these developments aim to create job opportunities and attract startups and entrepreneurs, particularly in tier-2 cities.
AARIZE Group
AARIZE South Drive, located in Sector 69 off Southern Peripheral Road, represents a premier SCO development that integrates retail, dining, and entertainment zones with office spaces. Aman Sharma, Co-founder and MD of AARIZE Group, emphasized the transformative potential of SCOs in creating vibrant business ecosystems and driving urban growth.
SCOs offer several investment advantages, including low construction and maintenance costs, high rental yields, and maximized ground coverage. Historical rental yields for SCOs have averaged between 9-10%, making them a compelling investment option compared to traditional retail or office properties. The flexibility and customization options available in SCOs further enhance their attractiveness to investors.
The success of SCOs in urban areas such as Chandigarh and Gurgaon has prompted their expansion into other regions of Haryana and beyond. The growing demand for SCOs is evident from the increasing number of new project launches and the interest from small and medium-sized enterprises (SMEs) and startups seeking innovative business solutions.
As developers continue to introduce and promote SCO projects, the potential for stable returns and diversified income streams is drawing more investors to this asset class. SCOs are poised to redefine the commercial real estate market, offering a flexible and profitable alternative to traditional commercial spaces.
Shop-Cum-Offices are reshaping India’s commercial real estate landscape by offering a unique blend of retail and office functionalities. The increasing popularity of SCOs reflects their ability to meet the evolving needs of businesses and investors. As the sector continues to grow, SCOs are set to play a crucial role in the future of commercial real estate in India, establishing themselves as a prominent and valuable asset class.