India’s real estate market will grow to Rs 65,000 crore (US$ 9.02 billion = 0.00902 trillion) before 2040 that was Rs. 12,000 crore (US$ 1.66 billion) in 2019. Real estate sector in India is expected to reach a market size of US$ 1 trillion by 2030 from US$ 120 billion in 2017 and contribute 13 per cent to 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. Indian real estate increased by 19.5 per cent CAGR from 2017 to 2020.Emergence of nuclear families, rapid urbanisation and rising household income are likely to remain the key drivers for growth in all spheres of real estate, including residential, commercial and retail. Rapid urbanisation in the country is pushing the growth of Real Estate. More than 70 % of India’s GDP will be contributed by the urban areas by 2020.According to the data released by (DPIIT), construction is the fourth largest sector in terms of FDI inflow. FDI in the sector (includes construction development and construction activities) stood at US$ 42.50 billion from April 2000 to March 2020 The private equity investments in Indian Real Estate have reached US$ 3.2 billion till September 2017 and hit record high of $ 28.66 billion till sept 2020 end Office space has been driven mostly by growth in ITeS/IT, BFSI, consulting and manufacturing sectors.
During 2019, the office leasing space reached 60.6 msf across eight major cities, registering a growth of 27 per cent y-o-y. In 2019, office sector demand with commercial leasing activity reached 69.4 msf. Co-working space across top seven cities increased to reach 12 sq ft by end of 2019.Warehousing space is expected to reach 247 msf in 2020 and see investment worth Rs 50,000 crore (US$ 7.76 billion) during 2018-20. Grade-A office space absorption is expected to cross 700 msf by 2022, with Delhi-NCR contributing the most to this demand. Housing sales reached 2.61 lakh units in 2019 across seven major cities.
Government of India along with the governments of respective States has taken several initiatives to encourage development in the sector. The Smart City Project, with a plan to build 100 smart cities, is a prime opportunity for real estate companies. Below are some of the other major Government initiatives: In order to revive around 1,600 stalled housing projects across top cities in the country, the Union Cabinet has approved the setting up of Rs 25,000 crore (US$ 3.58 billion) alternative investment fund (AIF).Under Pradhan Mantri Aawas Yojana (Urban) (PMAY (U)), 1.12 crore houses have been sanctioned in urban areas, creating 1.20 crore jobs. Government has created an Affordable Housing Fund (AHF) in the National Housing Bank (NHB) with an initial corpus of Rs 10,000 crore (US$ 1.43 billion) using priority sector lending short fall of banks/financial institutions for micro financing of the HFCs.On February 29, 2020, India formally approved 417 special economic zones (SEZs), of which 238 were already in operation. Majority of the SEZs are in the IT/ ITeS sector.The govt. has also raised FDI limits for townships and settlements development projects to 100 percent.Real Estate Projects within the Special Economic Zone (SEZ) also permitted 100 percent FDI.
The Securities and Exchange Board of India (SEBI) has given its approval for the Real Estate Investment Trust (REIT) platform, which will allow all kind of investors to invest in the Indian real estate market. It would create an opportunity worth Rs 1.25 trillion (US$ 19.65 billion) in the Indian market in the coming years. First REIT, which raised Rs 4,750 crore (US$ 679.64 million), was launched in the early 2019 by global investment firm Blackstone and Indian realty firm Embassy group.
The Securities and Exchange Board of India (SEBI) has given its approval for the Real Estate Investment Trust (REIT) platform, which will allow all kind of investors to invest in the Indian real estate market. It would create an opportunity worth Rs 1.25 trillion (US$ 19.65 billion) in the Indian market in the coming years. First REIT, which raised Rs 4,750 crore (US$ 679.64 million), was launched in the early 2019 by global investment firm Blackstone and Indian realty firm Embassy group.