Counted among the most globally recognized sectors in India, the real estate sector is developing at a rapid speed. It comprises four sub-sectors—housing, retail, hospitality, and commercial. The growth of the corporate environment and the demand for office space, urban and semi-urban accommodations are complementing the growth of this sector in India. In terms of direct, indirect and induced effects, the construction industry stands at the third position among the fourteen major sectors. Also, there are predictions that more non-resident Indian (NRI) investments will be incurred in short as well as long term as a result of real estate development. Therefore, the role of real estate developers in India is growing and continuing to be crucial with each passing year.
Indian Real Estate Industry: An overview of advantages
- Policy support- Foreign direct investment (FDI) of up to 100 per cent has been allowed by the government for townships and settlement development projects.
- Robust demand- Demand for residential and commercial realty in India is now being driven by increasing incomes, urbanization and economic growth. It is also considered a favored asset class for investments.
- Lucrative opportunities- An increasing requirement of space has been reported from various sectors like education, healthcare, e-commerce and logistics. Moreover, it is expected that co-living market size across India’s top 30 cities will grow more than double by 2025. The current size is US$ 6.67 billion and it would reach US$ 13.92 billion in 5 years.
- Growing investments- Private investments in the sector have surged owing to rising returns and transparency. In 2019, Indian real state attracted more than US$ 6.06 billion of investments into the realty sector. Also, the country’s real sector attracted over US$ 5 billion private equity (PE) inflows. Out of this, investment of nearly 66 per cent or US$ 3.3 billion was done in commercial real estate.
Increasing market size
It is expected that the real estate market in India will grow to Rs. 65,000 crore (US$ 9.30 billion) by 2040 from Rs.12,000 crore (US$ 1.72 billion) in 2019. Predictions are there that the real estate sector will contribute 13 per cent GDP by 2025 and reach a market size of US$ 1 trillion by 2030. Providing the required infrastructure for the country’s rising needs, notable growth has been shown by retail, hospitality and commercial real estate as well. From 2017 to 2028, real estate in India grew by 19.5 per cent Compound Annual Growth Rate (CAGR).
In recent times, high demand for office space has also been registered by several sectors such as IT and ITeS, retail, consulting and e-commerce.
Investments and Developments
With an increasing demand for office as well as residential spaces, the real estate developers in India are playing an important role by delivering hi-tech townships, integrated townships, group housing, shopping malls, office spaces, SCOs and hotels. Private equity and venture capital investments in the sector have also increased. Institutional investments are expected to reach the highest in a decade.
Road ahead
With a view to encourage development in the real estate sector, the Indian government is taking a number of radical initiatives. For instance, the Smart City Project that includes building 100 smart cities is a major opportunity for real estate developers in India. Moreover, the Real Estate Investment Trust (REIT) platform is approved by the Securities and Exchange Board of India (SEBI) that will facilitate investment in the real estate market in the country from all kinds of investors.
Founded in 1987, Omaxe is one of the leading real estate developers in India with a total of 118.61 million square feet of delivered space in real estate and construction contracting. For the last 32 years, it is continuing to deliver excellent quality and real estate spaces along with guaranteeing customer satisfaction and redefining lifestyle. Omaxe has created a niche in luxury as well as affordable segments by delivering amazing landmark projects and engineering marvels. Maintaining its status as a trusted real estate developer in India, its presence can be seen in as many as 27 cities across 8 states namely Uttar Pradesh, Madhya Pradesh, Punjab, Haryana, Uttarakhand, Rajasthan, Delhi and Himachal Pradesh. Its current undertakings involve a total of 21 real estate projects – 5 Group Housing, 9 Townships, 7 Commercial Malls/office spaces/Hotels/ SCOs.