Old office spaces makeover can generate big bucks: JLL

Out of the existing 642 million square feet of Grade-A office space in the top seven real estate markets in India, the top three -- Mumbai, Delhi-NCR and Bengaluru – comprise nearly 64 per cent of the total stock, as per the reported titled ‘Unlocking Value in Real Estate’. 

Around 28 per cent of these buildings are more than a decade old and do not have the latest facilities that newer buildings offer. 

“Upgrading these buildings with modern amenities, designs and building technology presents a massive investment opportunity of an estimated Rs 5,500 crore,” it said. 

Real estate investors and landlords are missing income opportunities and cost savings as their assets age in Asia Pacific, said JLL. Half of investment properties in prime locations in Asia Pacific are over 20 years old, leading the real estate firm to forecast that there is over $40 billion worth of unrealised value in aging and underperforming properties regionally, it said. 

The report noted that without asset enhancement, offices, shopping malls, hotels, residential buildings and industrial facilities will lose relevance due to evolving end-user habits and preferences. 

JLL’s research reveals rental rates for aged and outdated buildings are 10 pc to 40 pc lower than up-to-date, well-managed properties in similar locations. This marked difference in rates may also increase as newer post-pandemic designed buildings enter the market.