IBEF-印度房地产行业报告（英文）-2018.9-33页-1mb

Summary of India's Real Estate Sector

Core Content

The Indian real estate sector is projected to grow significantly, reaching US$ 1 trillion by 2030, up from US$ 120 billion in 2017. It is expected to contribute 13% to India's GDP by 2025, driven by rapid urbanization, economic growth, and supportive government policies.

Main Points

Market Overview and Trends

• Urbanization: The urban population is expected to reach 543 million by 2025, with 70% of GDP coming from urban areas by 2020.
• FDI Inflows: The real estate sector is the fourth largest FDI recipient, with cumulative inflows reaching US$ 24.87 billion from April 2000 to June 2018.
• Government Initiatives: The Housing for All program aims to build 60 million houses by 2022, including 40 million in rural areas and 20 million in urban areas.
• Smart Cities: The government plans to build 100 smart cities, which could reduce migration to metro areas.
• Real Estate Regulatory Act: Enacted in 2016 to regulate and promote the sector.

Growth Drivers

• Economic Growth: Expected to drive demand for commercial and retail space, with IT/ITeS, BFSI, and Telecom sectors leading the way.
• Urbanization: Creates a demand for residential and commercial real estate, especially in Tier 2 and Tier 3 cities.
• Tourism: The tourism industry is growing, with FTAs expected to reach 15.3 million by 2025, boosting the hospitality and hotel sectors.
• Policy Support: Initiatives like PMAY and NUHF aim to boost affordable housing and construction, while FDI liberalization and REITs provide new investment avenues.

Opportunities

• Affordable Housing: Expected to grow significantly, with 100% FDI allowed in townships and affordable housing supply up 100% quarter-on-quarter in 2018.
• Niche Sectors:
  • Education: High demand in NCR due to a growing young population.
  • Healthcare: Projected to reach US$ 372 billion by 2022, with a need for 2 million more hospital beds.
  • Senior Citizen Housing: Expected to grow to US$ 7.7 billion by 2030.
  • Service Apartments: Increasing tourist arrivals create demand for service apartments.
• Commercial Space: Expected to cross 600 million square feet by 2018 and 700 million by 2022, with Delhi-NCR being the main contributor.
• Retail and Malls: Organized retail is growing at 25-30% annually, with 85 new malls expected to open by 2023.
• SEZs: 100% FDI allowed in real estate projects within SEZs, contributing to US$ 85.54 billion in exports in FY18.

Key Industry Organizations

• CREDAI (Confederation of Real Estate Developers' Associations of India)

  • Address: 703, Ansal Bhawan, 16, Kasturba Gandhi Marg, New Delhi - 110 001
  • Contact: Tel: (011) 43126262/43126200, Fax: 91 11 43126211, Email: info@credai.org, Website: www.credai.org

• BAI (Builders' Association of India)

  • Address: G-1/G-20, Commerce Centre, J. Dadajee Road, Tardeo, Mumbai - 400034
  • Contact: Tel: 91 22 23514134, 23514802, 23520507, Fax: 91 22 23521328, Email: bai@vsnl.com, Website: www.baionline.in

Useful Information

Glossary

• BFSI: Banking, Financial Services and Insurance
• CAGR: Compound Annual Growth Rate
• CBD: Central Business District
• FDI: Foreign Direct Investment
• FSI: Floor Space Index
• HNI: High Net-worth Individual
• GOI: Government of India
• INR: Indian Rupee
• IT/ITeS: Information Technology/Information Technology Enabled Services
• MNC: Multinational Corporation
• NRI: Non Resident Indian
• SBD: Special Business District
• SEZ: Special Economic Zone
• US$: US Dollar

Exchange Rates (Fiscal Year)

Exchange Rates (Calendar Year)

Strategies Adopted

• Diversified Portfolio: Companies are expanding into residential, commercial, and township developments.
• Backward Integration: Establishing in-house facilities like architectural studios and manufacturing units.
• M&A Activities: Notable deals include Blackstone Group acquiring Indiabulls Real Estate and GIC investing in DLF Cyber City Developers.
• Risk Management: Using joint ventures with landowners for land sourcing.
• Superior Execution: Outsourcing support functions and focusing on cost rationalization and world-class infrastructure.

Conclusion

The Indian real estate sector is poised for substantial growth due to urbanization, economic expansion, and supportive government policies. With increased FDI, REITs, and affordable housing initiatives, the sector is becoming more attractive to both domestic and international investors. Key cities like Delhi-NCR, Mumbai, and Bengaluru are expected to lead in commercial and residential development, while SEZs and smart cities are set to further enhance the industry's prospects.