INRnews - Indian Real Estate News

Mr. Ganesh Raj, Senior Partner of Ernst & Young informed that the report depicts nine key trends which will shape the business landscape of the Indian real estate in another 3-5 years. There has been a shift in the project magnitude getting bigger; industry will witness a significant amount of Geographic De-concentration as the focus of developers will shift from metros to smaller cities; emergence of some national level developers; consumer acceptability towards leasehold residential properties will increase significantly; industry will witness a shift from Land Focused transactions to Development transactions; upward movement of construction giants on the value chain; emergence of a stronger real estate capital market is imminent and lastly when the Indian real estate market becomes more competitive and organized there will be a correction in the supply formats.

The Indian realty sector, which is estimated to be around 12 billion dollars, is growing at a rate of 30 per cent per annum and contributes about 14-15 per cent of the national GDP, the study revealed. The IT/ITES, retail and hospitality sectors are all driving the growth in Indian real estate in addition to the residential sector.

The IT and ITES sector are expected to continue growing at over 30%. An additional 367 million sq ft of office space will be required between now and 2012-13 to meet demand. In the unlikely scenario that there is a downturn in these sectors, the requirement for additional office space will decline to 256 million sq ft by 2012-13.

Retail real estate is booming too. By the end of 2008, 66 million sq ft of retail space will be added in the eight largest Indian cities, and 13 million sq ft in the next seven largest cities.

According to the Ministry of Tourism, by 2010 India will have 2.9 million hotel rooms compared to today’s 1.2 million. According to CRIS-Infac estimates, demand for hotel rooms will grow at a compounded annual growth rate of 10 per cent over the next five years.

India will also need 10 million new housing units by the year 2030, according to a projection by Asian Development Bank.

Real estate development in coming years would be boosted by release of land by public sector undertakings and government projects focusing on urban development, the study added.