Effects of RERA on Commercial Real Estate

RERA stands for Real Estate (Regulation and Development) Act, 2016. The act became applicable from May 1st this year. The former is receiving lot of coverage in the news lately. It will have a significant impact not only on residential real estate but also on commercial real estate company. Whether you are having a commercial property for lease or commercial property for sale you need to be informed about RERA.

Different stakeholders of commercial real estate such as developers, office occupiers as well as retail investors will be affected by this new act. We examine the benefits and drawbacks from the perspective of the various stakeholders.


Retail investors stand to gain. RERA empowers the former to have transparent as well as detailed data regarding the history and monetary capacity of relevant developers. They also have unhindered access to information about various aspects of the project.


Implementation of RERA will drive Grade-B developers to catch up with the offerings of Grade-A projects. Consequently, it will ramp up the number of choices to select from as well as bring down the existing price levels. Office space occupiers benefit from transparency regarding the relevant property/project as well as competitive and more affordable commercial real estate rates. The former will now be able to do an effective fair price comparison across projects.


Genuine developers who abide by the rules and regulations have nothing to worry. RERA implementation will weed out unscrupulous as well as fly-by-night operators. The credibility of genuine developers will be bolstered. As we all know trust and reputation matter a lot to prospective buyers.


Agreements entered into by various entities such as owners of land, investors as well as developers may be modified to comply with RERA. Currently the demand for commercial real estate is experiencing a significant surge encompassing the top 7 cities of India as well as tier-2 cities. RERA has come into force at an opportune period. FDI in commercial real estate is predicted to soar which is attributed to higher confidence. The latter is thanks to the transparency in commercial real estate dealings introduced by RERA. As Delhi has accepted RERA commercial property and commercial office space in Noida Extension have to comply with the act.

On the whole, the Indian real estate experts opine that implementation of RERA is good news for all the involved stakeholders in commercial real estate.