https://www.moneycontrol.com/news/business/real-estate/property-developers-ramp-up-on-rentals-as-demand-for-offices-malls-and-data-centres-soars-13507173.html
Property developers ramp up on rentals as demand for offices, malls and data centres soars
Top Indian real estate developers have more than doubled their dependence on rental and annuity based income in the last decade - now accounting for over 40 percent of revenue - as occupancies in offices and malls remain high at 94-99 percent, along with a rising demand for digital infrastructure such as data centres.
Much of this growth has happened in Bengaluru and Hyderabad, which together accounted for about 47 percent of India’s gross office leasing during the first half of 2025 (H1CY25), Knight Frank India Real Estate Q2 CY25 report has shown. The National Capital Region (NCR) and Mumbai remain the strongest mall rental markets, driven by luxury consumption.
Even with a booming residential housing sector - with the top seven cities recording record sales - developers are balancing cash flow with annuity based income. One case in point is DLF, which now derives more than 40 percent of its revenue from rentals.
Diversified real estate developer Prestige Estate’s malls are near full occupancy, and Macrotech Developers recorded Rs 500 crore in data centre sales during the June quarter. DLF in its FY25 annual report has guided for rental earnings before interest, tax, depreciation and amortisation (EBITDA) margins of over 70 percent, compared with 25-30 percent margins in residential projects, underscoring the strong demand in India’s commercial rental market.
Bengaluru-headquartered Prestige Estates leased 1.21 million square feet of offices at 94 percent occupancy during Q1FY26, with its malls posting 99 percent occupancy and accruing Rs 590 crore in gross turnover. The company has projected a pipeline of 5 million square feet of Grade-A offices under construction in Bengaluru and Hyderabad.