Real Estate – Overview
The Indian real estate sector is one of the most globally recognized sectors. In the country, it is the second largest employer after agriculture and is slated to grow at 30 per cent over the next decade. It is also expected that this sector will incur more non-resident Indian (NRI) investments in the near future, as a survey by an industry body has revealed a 35 per cent surge in the number of enquiries with property dealers. The Indian real estate market size is expected to touch US$ 180 billion by 2020. The Real Estate Sector alone contributes 6 % to the country’s gross domestic product (GDP).
Retail, hospitality and commercial real estate are also growing significantly, providing the much-needed infrastructure for India’s growing needs. Real estate has emerged as the second most active sector, raising US$ 1.2 billion from private equity (PE) investors in the last 10 months. Foreign investors have bought tenanted office space worth over US$ 2 billion in India in 2014, a four-fold rise compared to the previous year, in order to increase their rent-yielding commercial assets in Asia’s third largest economy. According to a study by Knight Frank, Mumbai is the best city in India for commercial real estate investment, with returns of 12-19 per cent likely in the next five years.
Favorable demographics, rising household incomes & growth in the IT sector have led to the growth in the real estate. The growing flow of FDI into Indian real estate is encouraging increased transparency. Developers, in order to attract funding, have revamped their accounting and management systems to meet due diligence standards. The Indian real estate sector has witnessed high growth in recent times with the rise in demand for office as well as residential spaces.