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Industry brief · Materials, infrastructure & industry

Commercial real estateoffices, warehouses, mixed-use; REITs

Development and ownership of Grade-A offices/tech parks, logistics warehouses, retail and mixed-use assets, increasingly held in listed REITs. India's office market is driven by global capability centres and now has five listed REITs (Embassy, Mindspace, Brookfield, Nexus Select, Knowledge Realty Trust); US offices remain bifurcated while US 'office' construction (which includes data centres) rose ~25% y/y; Europe repriced after the 2022 rate shock. Buildings are a poor reference class for cost (mean overrun 58%) and highly rate-sensitive (US 10Y 5.24% in Oct 2026).

Start a Decision Sprint See the parameters

Pack v1.0.0 · updated 5 Oct 2026 · 13 cited sources · 14 parameters · 10 swing factors.

At a glance

85Capex intensity · USD per sq ft (India Grade-A office, construction ex-land)range 20–900 · estimate

36Construction time · monthsrange 10–60 · estimate

58%Mean cost overrunrange 5%–150% · sourced

30%Mean schedule overrunrange 0%–100% · estimate

Pack defaults with their low–high range. Overruns are sector means as a share of the original budget or schedule. All parameters and sources

Sub-industries

Capex intensity ranges by configuration. The unit changes with the asset, so compare within a row, not across rows.

Sub-industry	Capex intensity	Notes
Grade-A office / IT parkMulti-tenant towers and campus-style tech parks (SEZ/non-SEZ).	55–900USD per sq ft (construction, ex-land)	India ~INR 5,000-8,000/sq ft (~USD 55-90); US/EU urban towers USD 400-900/sq ft (estimate).
Logistics & industrial warehousesGrade-A big-box, multi-storey urban logistics, cold chain.	20–250USD per sq ft	India ~INR 1,800-2,500/sq ft; US USD 120-250/sq ft (estimate). Prologis: ~1.3bn sq ft across 20 countries.
Retail malls & high streetsConsumption-led malls (Nexus Select, Phoenix Mills).	60–600USD per sq ft	estimate
Mixed-use & integrated townshipsOffice + retail + hospitality + residential; TOD around metro.	60–800USD per sq ft	estimate
REIT / InvIT ownership platformsListed vehicles distributing ≥90% of NDCF (India SEBI REIT regs).	100–1,500USD per sq ft (acquisition)	Valuation at cap rates of ~7.5-8.5% (India office) vs 4.5-9% globally (estimate).
Government/public redevelopmentGovernment housing/office redevelopment (e.g., GPRA colonies Delhi INR 32,850 cr, MoSPI).	40–150USD per sq ft	Tracked by MoSPI as 'Real Estate' (6 projects, INR 37,591 cr, Mar 2026).

Value chain

Inputs

land & development rights (FSI/TDR)
construction finance
cement, rebar & structural steel
glass & aluminium façade
HVAC, elevators, electrical & fire systems
labour
approvals (zoning, environment, RERA)
tenants (GCCs, 3PLs, retailers)

Process

land aggregation & title
masterplanning & approvals
design
construction
pre-leasing & leasing
stabilisation
asset management & capex refresh
REIT/fund monetisation

Outputs

leasable area (msf)
rental income & escalations
NOI / NDCF distributions
capital value (cap-rate based)
fit-out & parking income

Parameters

14 parameters: 1 sourced, 13 informed estimates. The bar shows the low–high range with the default marked; estimates are labelled and never presented as observed data.

Parameter	Default & range	Evidence	Source
Capex intensity(India Grade-A office, construction ex-land)	85 USD per sq ftrange 20–900	estimateas of 5 Oct 2026	Informed estimate; no single source
Construction monthsWarehouses 9-15 months; offices 30-48; mixed-use 36-60.	36 monthsrange 10–60	estimateas of 5 Oct 2026	Informed estimate; no single source
Cost overrun meanFlyvbjerg 2026: buildings mean real overrun 1.58 (N=186), 28.5% >50% — public/non-routine buildings dominate; private speculative offices typically 5-20% (estimate).	58%range 5%–150%	sourcedas of 5 Oct 2026	arxiv.org
Schedule overrun meanIndian RERA-registered projects frequently extend completion dates (estimate).	30%range 0%–100%	estimateas of 5 Oct 2026	Informed estimate; no single source
Asset life (years)	50 yearsrange 30–80	estimateas of 5 Oct 2026	Informed estimate; no single source
WACCIndia office REIT cost of capital ~10-11%; US ~7-9% (estimate).	10%range 7%–13%	estimateas of 5 Oct 2026	Informed estimate; no single source
Typical IRR(development, levered)	15%range 10%–22%	estimateas of 5 Oct 2026	Informed estimate; no single source
Utilization(occupancy)	87%range 65%–97%	estimateas of 5 Oct 2026	Informed estimate; no single source
Opex % of revenue	20%range 10%–35%	estimateas of 5 Oct 2026	Informed estimate; no single source
EBITDA margin(NOI margin)	78%range 60%–90%	estimateas of 5 Oct 2026	Informed estimate; no single source
Exit cap rate	8%range 4.5%–10%	estimateas of 5 Oct 2026	Informed estimate; no single source
Pre leasing thresholdpre-let before construction start	40%range 0%–70%	estimateas of 5 Oct 2026	Informed estimate; no single source
Lease escalationevery 3 years (India)	15%range 10%–15%	estimateas of 5 Oct 2026	Informed estimate; no single source
REIT distribution floorof NDCF distributed (SEBI REIT regs)	90%range 90%–100%	estimateas of 5 Oct 2026	Informed estimate; no single source

What moves value

Sorted by expected cost (probability × cost impact). Impacts are typical values for the sector; each one is driven by the shared factors listed, which is how one shock reaches several projects at once.

Swing factorProbabilityCost impactSchedule

Construction cost inflation (concrete, steel, MEP, labour)Commodity Shared factors: Construction materials 0.4 · Steel 0.3 · Electrical equipment 0.2 · Labour 0.2Watch: PPI new office construction +5.9% y/y; construction materials PPI +10.1% y/y

50%

3 mo

Approvals, land title & RERA compliance delaysRegulatory Shared factors: Policy 0.9Watch: building plan sanction times; TDR/FSI policy changes; title litigation

40%

9 mo

Contractor/sub-contractor insolvency & labour shortagesLabour Shared factors: Labour 0.7 · Interest rates 0.2Watch: contractor credit ratings; migrant labour availability

30%

6 mo

Refinancing wall / construction-loan tighteningFinancing Shared factors: Interest rates 0.8Watch: CMBS office delinquency; bank CRE exposure limits

35%

3 mo

ESG/energy-performance regulation (EPBD, BEE, Local Law 97)ESG Shared factors: Policy 0.7 · Power price 0.2Watch: EPC rating thresholds; carbon fines

35%

0 mo

Grid/utility connection for large campuses, logistics & DC conversionsInterface Shared factors: Grid queue 0.7 · Power price 0.2Watch: utility connection queues; substation lead times

30%

6 mo

Imported building-systems tariffs (s232 steel/aluminium/copper derivatives)Regulatory Shared factors: Policy 0.6 · Aluminium 0.2 · Copper 0.2Watch: s232 derivative lists; façade/HVAC price quotes

30%

2 mo

Leasing / pre-commitment shortfall at completionMarket Shared factors: Interest rates 0.4 · Policy 0.2Watch: pre-lease % at construction start; GCC hiring announcements; US office vacancy trend

40%

6 mo

Cap-rate expansion from higher long ratesFinancing Shared factors: Interest rates 0.9Watch: US 10Y > 5% (Oct 2026); India 10Y; REIT spreads vs G-sec

45%

0 mo

Tenant credit & structural demand shifts (hybrid work, AI-driven headcount)Market Shared factors: Policy 0.2 · Data-centre demand 0.2Watch: tenant layoffs; space-per-employee trends

35%

0 mo

Market signals

What moves the case

Key variables with their typical range and what they hit in the model.

Variable	Typical range	Affects
Rent growth / mark-to-marketIndia leases typically have 15% escalation every 3 years (estimate).	−10%–10%	Revenue
Occupancy / vacancyIndia Grade-A office vacancy ~15%; US office ~20% (estimate).	65%–97%	Revenue
Cap rate+50 bp cap rate ≈ −6 to −10% asset value.	4.5%–10%	Revenue, Financing
US commercial real estate prices+6.6% y/y in Q1 2026 after 2023-24 declines.	−15–15% y/y	Revenue
10Y government yieldUS 10Y 5.24% (Oct 2026) — cap-rate pressure; India 10Y 6.78%.	3–7.5	Financing
New office building construction PPI+5.9% y/y Aug 2026.	190–240index	Capex
New warehouse construction PPI+4.3% y/y Aug 2026.	220–260index	Capex
US office construction spending (incl. data centres)USD 150.7bn SAAR Aug 2026 (+24.6% y/y) — driven by data-centre builds.	90,000–160,000USD mn SAAR	Revenue

Show 3 more variables

Variable	Typical range	Affects
Data-centre / AI demand for powered landPowered shells and warehouse-to-DC conversions lift land values (estimate).	0–1qualitative index	Revenue
Yield on cost (stabilised NOI / total cost)Primary development margin driver vs exit cap rate.	6%–14%	Revenue, Opex
Construction materials PPI+10.1% y/y Aug 2026.	300–400index	Capex

Price feeds (14)

Series	Source / id	Unit	Frequency
US commercial real estate prices (y/y %)	COMREPUSQ159NFRED	% y/y	quarterly
US office construction spending	TLOFCONSFRED	USD mn SAAR	monthly
US commercial construction spending	TLCOMCONSFRED	USD mn SAAR	monthly
PPI: new office building construction	PCU236223236223FRED	index	monthly
PPI: new warehouse building construction	PCU236221236221FRED	index	monthly
PPI: leasing of professional & office buildings	PCU5311205311202FRED	index	monthly
PPI: general warehousing & storage services	PCU4931104931101FRED	index	monthly
PPI: construction materials	WPUSI012011FRED	index	monthly

Show 6 more feeds

Series	Source / id	Unit	Frequency
US 10Y Treasury	DGS10FRED	%	daily
India 10Y yield	INDIRLTLT01STMFRED	%	monthly
Euro area 10Y yield	IRLTLT01EZM156NFRED	%	monthly
Vanguard Real Estate ETF	VNQYahoo	USD	daily
NIFTY Realty	^CNXREALTYYahoo	index	daily
Eurostat construction cost index (new residential)	Eurostat:sts_copi_qother	index	quarterly

Listed tickers (25)

Market context only: these prices tend to react first when a driver moves. Named for context; no affiliation.

Operators · 21

DLF.NS DLF NSE · IN
GODREJPROP.NS Godrej Properties NSE · IN
PRESTIGE.NS Prestige Estates NSE · IN
OBEROIRLTY.NS Oberoi Realty NSE · IN
PHOENIXLTD.NS Phoenix Mills NSE · IN
BRIGADE.NS Brigade Enterprises NSE · IN
EMBASSY.NS Embassy Office Parks REIT NSE · IN
MINDSPACE.NS Mindspace Business Parks REIT NSE · IN
BIRET.NS Brookfield India Real Estate Trust NSE · IN
NXST.NS Nexus Select Trust NSE · IN
KRT-RR.NS Knowledge Realty Trust NSE · IN
PLD Prologis NYSE · US
BXP BXP NYSE · US
VNO Vornado NYSE · US
SLG SL Green NYSE · US
ARE Alexandria Real Estate NYSE · US
SGRO.L SEGRO LSE · EU
LAND.L Landsec LSE · EU
VNA.DE Vonovia XETRA · EU
URW.PA Unibail-Rodamco-Westfield Euronext Paris · EU
CTPNV.AS CTP (logistics parks) Euronext Amsterdam · EU

Suppliers · 3

OTIS Otis (elevators) NYSE · US
JCI Johnson Controls (HVAC/BMS) NYSE · US
KNEBV.HE KONE (elevators) Nasdaq Helsinki · EU

Proxys · 1

VNQ Vanguard Real Estate ETF NYSE Arca · US

Trends and research findings

Trends

US 'office' construction boom is a data-centre boom2025-2028
Census office construction spending hit USD 150.7bn SAAR in Aug 2026 (+24.6% y/y) while manufacturing construction fell 19% y/y.
fred.stlouisfed.org
US CRE prices recovering2026-2027
US commercial real estate prices +6.6% y/y in Q1 2026 after 2023-24 declines, but 10Y yields at 5.24% (Oct 2026) cap valuation upside.
fred.stlouisfed.org
India REIT market broadens2025-2030
Knowledge Realty Trust listed in 2025 (NSE: KRT-RR), joining Embassy, Mindspace, Brookfield and Nexus Select.
query1.finance.yahoo.com
Logistics platforms scale2025-2030
Prologis operates ~1.3bn sq ft in 20 countries; SEGRO portfolio £16.0bn (Dec 2025).
en.wikipedia.org
Construction costs re-accelerating2026-2027
PPI new office building construction +5.9% y/y and warehouse +4.3% y/y (Aug 2026); construction materials +10.1%.
fred.stlouisfed.org
European rate-shock legacy2023-2027
Vonovia's €10.7bn write-down and €6.76bn 2023 loss illustrate cap-rate sensitivity; euro-area 10Y ~3.2% (early 2026).
en.wikipedia.org

Research findings

Reference class: buildings
Flyvbjerg et al. (2026): buildings mean real cost overrun 58% (N=186), 28.5% exceed +50% — the worst non-nuclear, non-IT class after aerospace and dams.
arxiv.org
MoSPI real estate projects
PAIMANA Mar 2026: 6 central real-estate projects INR 37,591 cr (revised INR 37,582 cr), 40% spent; GPRA colonies redevelopment Delhi INR 32,850 cr at 46.5% progress.
paimana-proj.mospi.gov.in
Office construction PPI
US PPI for new office building construction rose from 207.8 (Jan 2023) to 224.4 (Aug 2026), +8% cumulative; +5.9% in the last year.
fred.stlouisfed.org
Construction spending mix shift
US office construction spending rose ~48% from Jan 2023 (USD 102bn) to Aug 2026 (USD 151bn SAAR), while manufacturing fell from a USD 250bn peak to USD 171bn.
fred.stlouisfed.org
Rate sensitivity case
Vonovia reported a €6.76bn loss for 2023 after writing down its portfolio by €10.7bn as rates and construction costs rose.
en.wikipedia.org
Logistics scale benchmark
Prologis: >15,000 land acres and >6,000 buildings (~1.3bn sq ft) across North America, LatAm, Europe and Asia (2025).
en.wikipedia.org

KPIs, regions and who builds

KPIs the pack tracks

occupancy (%)
gross absorption & net absorption (msf)
in-place rent vs market rent (MTM)
NOI and NOI margin
yield on cost vs exit cap rate
WALE (years)
LTV and interest coverage
NDCF/distribution per unit (REIT)
construction cost per sq ft
pre-leasing %
green-certified share (LEED/IGBC)

Regional notes

India	Office demand led by GCCs, BFSI and flex; five listed REITs (Embassy, Mindspace, Brookfield, Nexus Select, Knowledge Realty Trust); RERA governs approvals/escrow; land/approval timelines and state FSI/TDR policy dominate risk; India 10Y 6.78% (Jul 2026).
United States	Office bifurcation (trophy vs commodity), elevated vacancy and CMBS stress, while data-centre construction (booked as 'office' by Census) surges; logistics normalising; s232 metals tariffs raise façade/MEP costs; 10Y at 5.24%.
Europe	Post-2022 repricing; EPBD energy-performance rules; logistics (CTP, SEGRO) and data centres resilient; offices in Paris/Frankfurt with elevated vacancy (estimate).
Middle East	Gulf mega-developments (Saudi giga-projects) re-scoped 2025-26 (estimate); 2026 war weighs on Gulf demand.

Who builds and operates

Named for context; no affiliation. These are public market participants drawn from the research behind the pack. They are not Capibud clients or partners.

Operators · 13

DLF / DLF Cyber City Developers Gurugram · INLargest Indian listed developer; rental arm with GIC.
Embassy Office Parks REIT Bengaluru · INIndia's first listed REIT (2019); Blackstone-sponsored legacy.
Mindspace Business Parks REIT (K Raheja) Mumbai · INMumbai, Hyderabad, Pune parks.
Brookfield India Real Estate Trust Mumbai · INOffice REIT; Brookfield-sponsored.
Knowledge Realty Trust (Blackstone + Sattva) Bengaluru · INListed 2025 (NSE: KRT-RR) — India's largest office REIT by area (estimate).
Nexus Select Trust Mumbai · INRetail REIT (malls).
Godrej Properties / Prestige / Phoenix Mills / Brigade / Lodha India · INOffice, retail and mixed-use developers.
Prologis San Francisco · US~1.3bn sq ft, 6,000+ buildings in 20 countries (2025); pivot to data centres on powered land (estimate).
BXP / Vornado / SL Green US · USGateway-city office owners; trophy vs commodity bifurcation.
Blackstone Real Estate / Brookfield Properties New York / Toronto · USLargest private CRE investors; India sponsors.
SEGRO London · EUPortfolio £16.0bn (31 Dec 2025); logistics and data centres.
Vonovia Bochum · EU2023 loss €6.76bn after €10.7bn write-down — rate-shock case study.
Landsec / British Land / Gecina / Merlin / URW / CTP EU · EUEuropean office, retail, logistics owners.

Suppliers · 10

Larsen & Toubro (Buildings & Factories) / Shapoorji / Tata Projects EPC · INOffice and campus construction.
Turner / Skanska / AECOM Tishman / Bouygues / Vinci EPC · USGeneral contractors.
Otis / KONE / Schindler / TK Elevator OEM · USVertical transport.
Carrier / Daikin / Johnson Controls / Trane OEM · USHVAC & building management.
Schneider / Siemens / ABB / Legrand OEM · EUElectrical distribution, BMS.
Saint-Gobain / AIS Glass / Hindalco (façade aluminium) Materials · EUGlass & façade systems.
UltraTech / Ambuja / Tata Steel / JSW Materials · INCement & rebar.
CBRE / JLL / Cushman & Wakefield / Colliers Services · USLeasing, PM, valuation.
Gensler / HOK / Morphogenesis Services · USArchitecture & interiors.
Procore / Autodesk / Yardi / MRI Software · USConstruction & property management software.

Customers · 6

Global capability centres (GCCs) & IT/ITeS office tenants (India)Largest driver of Indian office absorption (estimate ~35-40%).
BFSI, consulting & flex-workspace operators (WeWork India, Awfis) officeFlex ~15-20% of Indian leasing (estimate).
3PLs, e-commerce & manufacturers warehousesAmazon, Flipkart, DHL, Delhivery; China+1 manufacturing.
Retailers & F&B brands mallsConsumption-led demand.
Hyperscalers & colocation providers powered land / data-centre conversionsUS office construction category includes data centres.
Retail & institutional REIT investors capitalSEBI small-and-medium REIT framework (2024, estimate).

Project template

Work breakdown

Share of total duration per step; steps overlap where predecessors allow, as the bars show. O / ML / P are optimistic, most-likely and pessimistic multipliers on each step's duration; the hatched tail is the pessimistic case.

ID	Step & timing	Share	O / ML / P
E100	Land acquisition, title diligence & JDADevelop · factors: Policy, Interest rates	12%	0.9 / 1 / 1.8
E200	Masterplan, zoning/FSI, environmental & RERA approvalsDevelop · factors: Policy	15%	0.9 / 1 / 1.8
E300	Architectural, structural & MEP designEngineer · factors: Labour	10%	0.9 / 1 / 1.3
E400	Construction finance & pre-leasingDevelop · factors: Interest rates, Data-centre demand	10%	0.9 / 1 / 1.6
E500	Main contractor & package procurementProcure · EPC · factors: Construction materials	6%	0.9 / 1 / 1.3
E600	Excavation, shoring & substructureConstruct · EPC · factors: Construction materials, Steel, Labour	15%	0.9 / 1 / 1.5
E700	Superstructure (RCC / steel frame)Construct · EPC · factors: Construction materials, Steel	30%	0.9 / 1 / 1.4
E800	Façade & glazingConstruct · EPC · factors: Aluminium, Construction materials, Labour	15%	0.9 / 1 / 1.5
E900	MEP: HVAC, electrical, fire, elevators, BMSConstruct · OEM · factors: Electrical equipment, Copper, Labour	25%	0.9 / 1 / 1.5
E1000	Utility & grid connection, landscaping, common areasConstruct · EPC · factors: Grid queue, Construction materials	10%	0.9 / 1 / 1.6
E1100	Testing, commissioning & occupancy certificateCommission · factors: Policy, Labour	6%	0.9 / 1 / 1.7
E1200	Tenant fit-outs, lease-up & stabilisationCommission · factors: Interest rates, Data-centre demand	15%	0.8 / 1 / 2

Cost breakdown

Share of capex by line, with the commodity exposure of each line (the share of that line that moves with the commodity).

Land & development rights20%
Develop
- Policy 50%
- Interest rates 30%
Superstructure20%
Construction
- Construction materials 50%
- Steel 40%
MEP systems (HVAC, electrical, elevators, fire, BMS)18%
Equipment
- Electrical equipment 50%
- Copper 20%
Substructure & foundations10%
Construction
- Construction materials 60%
- Steel 30%
Façade & glazing8%
Construction
- Aluminium 40%
- Construction materials 20%
Finishes, common areas & landscaping7%
Construction
- Construction materials 40%
Design, PMC & consultants5%
Engineering
- Labour 70%
Approvals, premiums & statutory fees5%
Indirects
- Policy 90%
Financing costs & contingency5%
Indirects
- Interest rates 80%
Leasing commissions, marketing & tenant incentives2%
Commissioning
- Interest rates 20%

Financial template

Revenue model

Lease rentals (per sq ft per month) with periodic escalations, CAM/maintenance charges, parking and fit-out income; value realised via REIT/fund sale at exit cap rate; REITs distribute ≥90% of NDCF.

Margin driver

Yield on cost (stabilised NOI / total cost)

Ramp-up

2 years to steady state

How Capibud uses this pack

A pack is a starting position, not a forecast. When a commercial real estate decision opens in Capibud, pack v1.0.0 is copied in and pinned to that decision. The 14 parameters, 10 swing factors and templates the committee saw stay attached to the decision record, even after the pack is next refreshed.

Parameter ranges and WBS durations seed the P50, P80 and P90 for capex, schedule and value. Your own estimates, vendor quotes and actuals replace pack defaults line by line, and the record shows which numbers are still defaults.

Each swing factor is wired to shared factors; here the heaviest are policy, labour, interest rates and construction materials. A move in one factor hits every exposed project in the same scenario, which is how the capital committee sees concentration across a book rather than project by project.

The 14 price feeds and 25 listed tickers feed the brain, which watches for drivers moving outside their pack range and drafts the change for a person to review.

Shared factors behind this pack's swing factors

Policy
Labour
Interest rates
Construction materials
Grid queue
Steel
Electrical equipment

Relative weight: probability × impact × driver weight, summed over swing factors.

Capex tied to a shared factor

Construction materials20.4%
Policy14.5%
Steel11%
Interest rates10.4%
Electrical equipment9%
Copper3.6%
Labour3.5%

Share of total capex, from the cost breakdown and its commodity exposures.

Sources

Every link opens the original source in a new tab. Values marked as estimates are informed estimates by the Capibud research team.

fred.stlouisfed.orghttps://fred.stlouisfed.org/series/TLOFCONS
fred.stlouisfed.orghttps://fred.stlouisfed.org/series/COMREPUSQ159N
fred.stlouisfed.orghttps://fred.stlouisfed.org/series/PCU236223236223
fred.stlouisfed.orghttps://fred.stlouisfed.org/series/PCU236221236221
fred.stlouisfed.orghttps://fred.stlouisfed.org/series/TLMFGCONS
fred.stlouisfed.orghttps://fred.stlouisfed.org/series/DGS10
arxiv.orghttps://arxiv.org/abs/2606.15757
paimana-proj.mospi.gov.inhttps://paimana-proj.mospi.gov.in/Content/ArchiveReport/flash/2025-26/FlashReport_March_2026.pdf
en.wikipedia.orghttps://en.wikipedia.org/wiki/Prologis
en.wikipedia.orghttps://en.wikipedia.org/wiki/Segro
en.wikipedia.orghttps://en.wikipedia.org/wiki/Vonovia
en.wikipedia.orghttps://en.wikipedia.org/wiki/DLF_(company
query1.finance.yahoo.comhttps://query1.finance.yahoo.com/v8/finance/chart/KRT-RR.NS

Bring us one real decision in commercial real estate.

We start it from the Commercial real estate pack v1.0.0: 14 parameters, 10 swing factors and the 12-step project template, pinned to your decision.