Indian Real Estate Market
Real Estate in India is witnessing a boom with an unprecedented price rise in all type of real estate ie: residential, commercial and industrial real estate. This phenomena is not only seen in the major metropolitan and developed cities, but also in the small towns of the country.
According to one of the largest global financial management company Merrill Lynch, Realty sector in India is expected to grow from $12 billion in 2005 to $100 billion by the year 2015. The country is the most growing real estate market in Asia.
The realty and housing sector in India is very important as for every rupee invested in constructing houses, nearly 78 paise is added to the GDP of the country. The sector is the second largest employment generator in the country after agriculture.
Nearly 80 per cent of real estate development is for residential use, and the rest comprises of offices, shopping centers & malls, and the hospitality industry ie. hotels and hospitals. This high growth in the sector is because of the growing off-shoring business, including call centres, high-end technology consulting, and programming houses.
Government Support in Real Estate Sector The industry is witnessing an all time high, with the Government also encouraging FDI in the country. This has further fueled the real estate industry in India. Improved infrastructure and better facilities important factors that have contributed in boosting the realty prospects. In the year 2002, the Indian Government started certain reforms in the economic policy that allowed 100 per cent foreign direct investment (FDI) in housing sector through integrated township development. This provided the sector with the much-needed capital. It also benefited the sector by the entry of professional companies and players equipped with real estate expertise. However, the foreign developer have to get prior approval of the Foreign Investment Promotion Board.
Industrial Real Estate Scenario India is experiencing a high growth rate across industries. With large number of international players, entering the country in manufacturing and service sector, there is an increased demand for industrial real estate. The sector is attracting more and more investors from abroad.
Global investors are planning multi-billion dollar FDIs into the real-estate sector across cities and towns in India. This also requires support from both central and respective state governments to provide `single-window clearance' to these investors .
Cities like Ahmedabad, Lucknow, Jaipur, Pune and witnessing fast realty development projects as more and more IT /BPO companies expand their operations within the country. Other cities like Vadodara, Goa and Kolkata are also seeing large establishment by various companies like Intel, Reuters, H-P and Broadcom.
Metropolitan cities like Delhi NCR region, Mumbai, Bangalore and Chennai are experiencing fastest growth in real estate markets.
Commercial Real Estate Scenario The commercial real estate in India is on upturn. The main reasons for growth in this sector is favorable demographics, increasing purchasing power, existence of sound banks & housing finance companies providing efficient real estate services, and also reforms initiated by the government to attract global investors in this sector.
There is an increasing demand for commercial office space due to the burgeoning outsourcing and IT/ ITES industries. Major domestic and global players in the BPO, IT industry are setting up headquarters and centers in India. This has considerably increased the demand for office space. Gurgaon, Noida in the NCR region are fast becoming the outsourcing hub of India. Cities of Bangalore, Chennai and Hyderabad are also home to Various IT/ ITES multinationals. Therefore the price of commercial property in this region is quite high. International companies and global investors are therefore investing in the real estate sector.
Growing retail trade in the country is another factor that has contributed to the realty boom. With rising incomes, increasing purchasing power and exposure to organized retail formats, consumers have experienced change in their consumption pattern. There are numerous retail projects being undertaken by large companies. These include shopping malls, theme and entertainment marks, multiplexes across the country.
Residential Real Estate Scenario With rising population, increase in the working population and rising disposable incomes, people all across the country are purchasing land, apartments, independent houses. There is a shortage of residential sector and areas, especially the urban areas. this has lead to a price rise. Major real estate developers are now developing housing societies, apartments etc for meeting the ever increasing residential property demand.
Real estate investment by foreign Players Below is the list of some major international players who have invested in the real estate sector in India These companies have either made direct investments in the sector or have invested in large realty funds for building IT parks, theme parks, business centers etc:
|Name of the Company||Investment Amount|
|Morgan Stanley||$ 68 million|
|Merrill Lynch||$ 50 million|
|GE Commercial Finance Real Estate||in an $800 million realty fund|
|Calpers||Around $ 100 million in IL&FS realty fund|
List of Indian CitiesIndian Realty sector is witnessing an all time with development and soaring prices across the country. Below is the list of certain Indian cities that have been divided into three categories.
High Growth Cities