India amongst front-runners to drive AI
augmentation, demographic shifts and energy security in the APAC region: Colliers India.
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Rapid
digitalization and strong adoption set to drive India’s AI market beyond USD
500-billion in the coming decades.
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India
accounts for one-third of skilled global talent; making major leaps in the
areas of AI and automation.
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India’s
sustainability adoption remains highest in the office market;
two-thirds of Grade A stock is currently green-certified.
Rapid investments in Artificial Intelligence (AI)
and growing pressure on energy systems are reshaping the Asia Pacific (APAC)
region’s commercial real estate, workforce, and business strategies, according
to a recent global report by Colliers – Building Resilience: 5 Megatrends
Redefining Corporate Real Estate. The report outlines the long-term structural
changes and ongoing megatrends that are reshaping the office market strategies
worldwide.
It further highlights how these five distinct yet
interconnected megatrends, such as AI-enabled workforces, seismic
demographic shifts, energy scarcity and security, climate risks, and shifting
global order, are influencing corporate real estate decisions, which are
central to future location, investment and talent strategies. With the APAC
region expected to account for around 60 per cent of global economic growth in
the coming decades, the region is set to play an increasingly important role in
how companies plan for the future.
Within APAC, India stands out as a key growth
engine, with megatrends like AI-enabled workforces, seismic demographic shifts,
and energy security making significant strides across the commercial real
estate landscape.
Technology augmentation
through AI-enabled workforces
The growing integration of automation, analytics,
and AI in business functions is transforming how organizations operate, make
decisions, and plan their real estate needs. Within this landscape, India is
fast emerging as an AI hub, underpinned by a rapidly expanding digital
ecosystem and a deep talent base.
In addition to the
ongoing digitalization initiatives, heightened AI adoption across
workspaces, growing demand for large language models (LLMs), and robust
government support, are likely to push India’s AI market size from over
USD 9.00-billion currently to more than USD 500-billion in the coming
decades. Moreover, as companies continue to expand capabilities across AI
and machine learning, cloud computation, and advanced digital technologies,
India will continue to remain a preferred destination for global firms, owing
to competitive rentals, relatively lower cost of living, and availability of a
large and relatively younger talent pool.
Harnessing ongoing seismic
demographic shifts
India is well placed to gain benefits emerging from
demographic dividends arising out of its higher proportion of global workforce
and relatively young population having a median age of ~29 years. With over 1.4-billion
people, India currently accounts for ~18 per cent of the world’s population. This
demographic advantage positions India as a key global talent hub, especially as
mature markets in developed economies face shrinking talent pools.
Notably, major Indian cities such as Bengaluru,
Hyderabad, Delhi NCR, Chennai, Mumbai, and Pune rank among the top 10 tech
talent acquisition markets across the APAC region. As more young
professionals enter the workforce, occupier preferences will continue to
evolve, driving the demand for next-gen, technology-adept workspaces.
India adds 2-3-million STEM graduates annually,
making up about one-third of the global skilled talent availability,
simultaneously benefitting from a relatively young workforce. This demographic
advantage will continue to support sustained expansion by both domestic and global
companies, driving office space demand in the country. Additionally, strong
economic growth prospects, rental arbitrage, and continued adoption of
distributed workplace strategies are likely to fuel long-term commercial real
estate demand in India.
“More importantly, Global Capability Centre (GCC)
space uptake, which drives the majority of the office leasing, will continue to
strengthen with the deepening of capabilities in R&D, engineering, AI,
machine learning, and cloud computing,” said Arpit Mehrotra, Managing
Director, Office Services, India, Colliers.
Tackling energy scarcity
and security
Energy availability and security is becoming a key
factor in real estate location and investment decisions, particularly in
rapidly urbanizing markets. In recent years, India is making significant efforts
to address energy scarcity and strengthen energy security with an increasing
focus on green-certified buildings, renewable energy adoption, retrofitting of
older buildings, and broader Environmental, Social, and Governance (ESG)
integration.
Notably, India’s sustainability adoption is highest
in commercial real estate, with green-certified buildings accounting for nearly
two-thirds of the current Grade A office stock. Developers, investors, and
occupiers are proactively enhancing sustainable features across the entire
asset lifecycle.
In India, over 420-million sq. ft. of Grade A office
buildings are currently over 10 years old and hold retrofitting potential,
presenting a significant investment opportunity of over USD 5.00-billion. This
will not only bring a transformational change in asset quality and energy
efficiency but also make properties more sustainable in the long-term.
Mitigating climate risk
More frequent extreme weather events and evolving
regulatory expectations are driving new approaches to resilience and
challenging the long-term viability of certain locations, with many APAC
markets facing heightened exposure to climate-related disruptions. India is
highly exposed to climate risks, from heatwaves to urban flooding, and this is
likely to drive real estate occupiers to prioritize green buildings, resilient
and sustainability-led workplaces, climate-tech adoption and relocation to
lower-risk regions.
Shifting of global order
and emergence of newer business hubs
Changes in trade relationships, supply chains, and
economic growth patterns are prompting businesses to reassess traditional
models and expand into new markets, with APAC expected to account for a growing
share of global economic activity and play a central role in trade, investment,
and supply chain diversification in the coming decades.
“Asia Pacific’s dynamism shows there’s no longer a
global monopoly on innovation or competition. The region will become an
increasingly important factor in location strategies globally, whether as a
future growth centre, vital supply chain link, or source of skilled talent. Moreover, the
prevailing dynamism will push organizations to act now to strengthen resilience
and prepare for the future. Organizations and occupiers which adapt proactively
will be best equipped to thrive,” said Mike Davis, Managing Director, Asia
Pacific, Occupier Services, Colliers.
These megatrends highlight the need for businesses
to rethink how they plan for uncertainty and build resilience in their
strategies. The combination of technological changes, demographic shifts, and
infrastructure pressures are prompting occupiers to rethink everything – from
talent strategies and workplace design to supply chains and long-term risk
planning.
Organizations that take a proactive approach to
these changes will be better positioned to navigate disruption and unlock
long-term value. In fact, by focusing on flexibility, strengthening workforce
capabilities, and embedding resilience into decision-making, businesses can
position themselves for sustained success in an increasingly complex
environment.