ROBUST DEMAND:  

Increasing incomes, urbanization, and economic growth are driving residential and commercial realty demand in India. It has also become a preferred asset class for investment.

ATTRACTIVE OPPORTUNITIES:

Requirement of space are growing in the sectors like education and healthcare, e-commerce and logistics as well as overall retail chain business.

POLICY SUPPORT:

The Indian government allowed FDI of up to 100 percent for townships and settlement development projects.

INCREASING INVESTMENTS:

Driven by increasing transparency and returns, private investments in the sector have surged. 2009-18*, the Indian real estate sector attracted institutional investments worth US$ 30 BILLION.           

Introduction:

The real estate sector is one of the most globally recognized sectors. The real estate sector comprises four sub-sectors - housing, retail, hospitality, and commercial. The growth of this sector is well complemented by the growth of the corporate environment and the demand for office space as well as urban and semi-urban accommodations.

It is also expected that this sector will incur more non-resident Indian (NRI) investments in both the short term and the long term. Bengaluru is expected to be the most favored property investment destination for NRIs, followed by Ahmedabad, Pune, Chennai, Goa, Delhi, and Dehradun.

Market Size:

Real estate sector in India is expected to reach a market size of US$ US$ 1 trillion by 2030 from US$ 120 billion in 2017 and contribute 13 per cent of the country’s GDP by 2025. Retail, hospitality and commercial real estate are also growing significantly, providing the much-needed infrastructure for India's growing needs.

Sectors such as IT and ITeS, retail, consulting, and e-commerce have registered high demand for office space in recent times. Commercial office stock in India is expected to cross 600 million square feet by 2018 end while office space leasing in the top eight cities is expected to cross 100 million square feet during 2018-20. Co-working space across top seven cities has increased sharply in 2018 (up to September), reaching 3.44 million square feet, compared to 1.11 million square feet for the same period in 2017.

Investments/Developments:

The Indian real estate sector has witnessed high growth in recent times with the rise in demand for office as well as residential spaces.

According to data released by the Department of Industrial Policy and Promotion (DIPP), the construction development sector in India has received Foreign Direct Investment (FDI) equity inflows to the tune of US$ 24.91 billion in the period April 2000-December 2018.

Some of the major investments and developments in this sector are as follows:

• Housing launches across the top eight Indian cities increased 75 percent in 2018 to 182,207 units.
• In March 2019, Embassy Office Parks, India’s first real estate investment trust (REIT) went public.
• Warehousing space in the top eight Indian cities increased 22 percent y-o-y in 2018 to 169 mn sq. ft.
• Around 5.1 million sq. ft. of retail space became operational in the top seven Indian cities in 2018.
• In May 2018, Blackstone Group acquired One Indiabulls in Chennai from Indiabulls Real Estate for around Rs 900 crore (US$ 136.9 million).
• In February 2018, DLF bought 11.76 acres of land for Rs 15 billion (US$ 231.7 million) for its expansion in Gurugram, Haryana.

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