Friday, October 5, 2007

Indian Real Estate On The Rise

Indian Real Estate market is growing at a rapid pace as a result of increased property prices and constant demand from buyers as well as investors. Soaring economic growth, promising demographic and socio-economic factors have also led to a steep rise in demand for housing and commercial real estate. According to experts, The Indian real estate market is expected to grow at 33% between or by 2010. Significant growth in its market size has been noted which is from $12 billion to $50 billion. Total housing spend is expected to grow at a CAGR of 18.60% from Rs 171,800 crore in 2005 to Rs 403,400 crore in 2010. Indian estate market will remain an appealing investment option for both domestic and foreign investors.

The major boost to the real estate market is given by the IT/ITEs companies, setting up their high profile office space in India. Established real estate markets like Mumbai, Delhi and growing markets like Bangalore , Hyderabad, and Chennai are zooming upwards; other Indian cities are also surrendering to the allure of booming real estate market. Construction activity across the country is on an upswing, the commercial property real estate demand is expected to be around 350mn sq ft out of which IT/ITES and organized retailing sector should contribute around 300mn sq ft.

Retail sector has also added to the development of real estate market and will continue to do so as many metros witnessing a spurt in the number of malls and multiplexes, with many major companies entering into the scene. Study says the number of malls in Kolkata, Mumbai, Bangalore, New Delhi, Hyderabad and Pune will grow to 300 by 2010 as against their present strength of 50.

India will have a demand-supply gap of 17.9 million housing units by 2010; the Real Estate market is currently growing at 30 per cent per annum and offering maximum returns to its investors. The domestic real estate market, which is presently estimated at $16 billion (Rs 72, 496 billion), will increase by over three and a half times and touch $60 billion (Rs 2,71,8 asset 60 crore) by 2010.

1 comment:

shruti said...

With the Indian real estate market slated to grow 35-40 per cent in value terms over the next two years, private equity (PE) players are lining up significant investments in the segment. Led by Blackstone and the PE arm of Deutsche Bank, a host of players -including Red Fort Capital Advisors, Starwood Capital and Walton Street - are expected to invest close to US$ 12 billion combined in homes, offices, townships, hotels and other projects. In 2006, markets regulator SEBI opened up the real estate market to PE investments. The first year was a learning period. The following year saw a real correction in the market, with large incremental growth rather than dramatic growth, where stock market money went into special purpose vehicle-level investments. Experts say that in calendar 2007 alone, PE players would have invested US$ five billion in the Indian real estate sector. But there is need for investments of up to US$ 18-20 billion, which are expected in FY09 and FY10. Investments of US$ 1,400 billion are being made by Real Estate Investment Trusts globally. Hence, more global investors will start looking at Indian realty. This investment zeal comes in the backdrop of a much broader enthusiasm that PE players have shown across sectors in India in recent times. This trend is likely to continue strongly through 2010, driven by robust economic growth and attractive market valuations.For more view-