India's Rupee Devaluation Finds Unexpected Beneficiaries in REITs and Managed Office Properties

India's Commercial Real Estate Market Poised to Gain from Rupee Devaluation

The listed real estate investment trusts (REITs) in the office segment, as well as the managed and flex office segments, are expected to reap benefits from the continued devaluation of the Indian rupee against the US dollar and other foreign currencies. Industry experts say that multinational firms may look to seek out more arbitrage for their strengthening currencies by seeking talent and real estate in India.

The Indian rupee has been trading at 95.24 to the dollar on May 25, with the currency depreciating by nearly 5 percent since the outbreak of hostilities in West Asia at the end of February. Operators in the space in India say that with leasing for global capability centres (GCCs) in India continuing to grow, rentals in most micro-markets in cities are expected to grow, despite current "sub-dollar" rentals in many of these markets, implying rentals of less than $1 per square foot per month.

The recent drop in the value of the Indian rupee is good news for India's commercial real estate market, especially REITs and managed/flex office operators. When the rupee falls against the dollar, the cost of staying in a dollar-denominated GCC falls. This makes India an even more attractive place to merge and grow, according to Peush Jain, managing director, commercial leasing and advisory, ANAROCK Group.

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GCCs, which are set up by technology firms, as well as large overseas companies dealing in segments like automobiles, retail, industrials, medical instruments, telecommunications, and others, are significantly aimed at the exports of services, which also align with the devaluation of the rupee. India continues to offer the best talent at the most reasonable price that is English speaking, and the country has moved up in the value chain of offices, from a call centre to a back office, to front office functions now.

According to Karan Virwani, managing director and CEO of WeWork India, companies setting up GCCs have gained more from the rupee's weakening than from tools such as artificial intelligence. In the last 12 months or so, the gains that just rupee devaluation has given to a lot of these companies is far greater than what AI or reducing headcount would give.

Experts added that while some of the new and would-be GCC occupiers are exercising a temporary phase of caution amid the geopolitical crisis in West Asia, unstable oil prices, and the prospect of tightening interest rates, large enterprises, including Fortune 500 companies, as well as mid-sized enterprises tend to seek out REITs and branded managed office and flex players to expand at scale.

Comparison of Growth in Flex Space Portfolio in India

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The growth of AI-led hiring, with nearly 300,000 open roles, is leading to significant growth in the flex space portfolio in India. Flex space stock is expected to grow to 324 million square feet by 2030, with flex space for GCCs expected to increase at a compounded annual growth rate of 28 percent over the same period.

Occupancy in flex and managed spaces is also expected to be healthy in the near-to-medium term, according to rating agencies. "Occupancy, which had surged around 300 basis points over the three years through December 2025, reaching around 84 percent, is expected to remain steady in the medium term," according to a recent report from CRISIL Ratings.