The real estate and construction sector plays an important role in the development of India’s infrastructure base, and is one of the largest generators of economic activity. It stimulates demand in more than 250 ancillary industries, and serves as a propeller for private sector involvement in the growth of the country’s built environment, according to the CBRE–AMCHAM report, India Real Estate Market
According to CBRE research, long-term prospects appear positive for the realty sector, with a potential increase in completed space from 3.6 billion sq. ft. in 2013–14 to nearly 8.2 billion sq. ft. by 2025. This is likely to generate significant employment opportunities to the tune of almost 17 million by 2025—providing the country with substantial socio-economic opportunities for growth. Consequently, the contribution of the real estate sector to the economy is also expected to more than double from 6.3% in 2013–14 to almost 13% by 2025. This projected expansion is, however, subject to an effective utilization of potential growth opportunities and implementation of relevant policy measures to resolve bottle necks plaguing the sector.
Commenting on the findings of the report, Mr. Anshuman Magazine, Chairman and Managing Director of CBRE, South Asia Pvt. Ltd., said, “Looking ahead, much of the realty revival in 2014 will depend on the implementation of the recently announced economic policies. Sentiments are not expected to improve before the second half of 2014. A clear, forward looking and reform-oriented economic policy by the new government might trigger growth by the second half of the year.”
Mr. Ajay Singha, Executive Director, Amcham India stated “The burgeoning importance of the real estate sector lies in its significant contribution in the development of India’s infrastructure base. The Government of India is taking several steps to boost growth in the real estate sector as that would help create employment and improve the country’s economy as well. The sectoral outlook put forward by this report would prove very useful for studying the overall Indian real estate market. We look forward to work with CBRE again for such initiatives.”
The major demand drivers for India’s real estate market have been sustained economic growth, large scale urbanization, expansion of the services industry, increased disposable income, and the growing recognition of the sector as a conventional investment asset class. Rapid urbanization has offered tremendous opportunities for real estate development, particularly for the housing segment. Additionally, burgeoning growth in the IT/ITeS industry has been a major demand driver for the growth of commercial real estate across the country. A perceived increase in household income is expected to further fuel consumption, and act as a support base for the growth of organized retail real estate.
The CBRE–AMCHAM report, India Real Estate Market Scenario, attempts to present the pivotal role played by the real estate sector in the country’s economy, as well as the sector’s contribution in attracting investments. Apart from a topical presentation on the realty sector’s major asset classes across leading cities, along with market outlooks for each, the report also briefly discusses the impact of regulatory developments on the sector. Most importantly, the report presents a city-level real estate mapping of six major urban centers of India, together with a medium to long-term outlook on each segment.
Mr. Anshuman Magazine adds, “As India continues to integrate itself with the global economy, there have been efforts from both within and without the realty sector to adopt international standards and best practices, while promoting transparency and fair practices to align industry dynamics with consumer expectations. Consequently, the real estate landscape of India has witnessed radical transformation, with constantly evolving trends and developments.
“While the Union Budget 2014–15 made encouraging announcements for infrastructure, manufacturing, and affordable housing, going forward, the sector’s growth will depend to a large extent on the actual implementation of these policies by the new government.”
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