Experts see 35-40% growth

The Indian real estate sector has started reviving with the first half of the year drawing about US$2.7 billion investments and is projected to grow by 35%-40% over the next couple of years.

The real estate sector is in a state of nirvana with revolutionary reforms playing charm to attract investments and restore confidence in the sector, said Sanjay Dutt, Chairman, FICCI Real Estate Committee, and MD and CEO, Tata Realty and Infrastructure Ltd.

“2019 has started on a positive note with about US$2.7 billion of real estate investments recorded in the first half of the year in various asset classes across the country,” Dutt said.

“Improvement in infrastructure, roads, and metros coupled with the increased speed of technology implementation (e.g. 5G) will be impactful game changers for the sector and will improve the investor interest in the sector,” he anticipated.

Dutt was speaking at the ‘Conference on Real Estate Financing’ on 26 July 2019 which was organized by FICCI.

The launch of India’s first Real Estate Investment Trust (REIT) is another positive move for the sector further building confidence amongst global real estate investors to invest in India, he noted.

“The majority of the funds and private equities are investing in commercial and warehousing spaces and top 40-50 million square feet of space is getting absorbed in major cities of India,” he said.

“Liquidity, low cost housing and leveraging new ideas will bring a paradigm shift to the Indian real estate sector,” added Dr Niranjan Hiranandani, Chairman & MD, Hiranandani Group.

“The real estate sector in the country is likely to grow by 35%-40% in the next couple of years,” projected Dr Hiranandani.

He further stated that the new concepts like co-working, co-living will be the new face of real estate industry.

However, he felt that the NBFC issues need to be solved and liquidity needs to be improved as lack of liquidity is delaying consumer decisions despite demand.

“Absorption by IT/ITeS has been the primary driver of the commercial absorption and new concepts like co-working and co-living will bring in more investments in the sector,” believes Raj Menda, Co-Chair, FICCI Real Estate Committee and Corporate Chairman, RMZ Corp.

“A robust and well catered real estate sector assists in strengthening a host of other ancillary sectors and is significant for a growth economy such as ours,” elaborated Dr Shrinivas Rao, CEO, APAC, Vestian.

“One of the major trends observed in the last decade has been the rise in institutional investment in real estate, particularly PE investment that has been a key factor in keeping the market confident about its revival,” said Dr Rao.

FICCI-Vestian report ‘Real Estate Investment in India: A Brief Analysis’ was released during the event, which said that the Indian real estate sector is on a road to revival.

Major findings of the report that portrays the investment scenario in the real estate industry during the period of 2015-2019 include:

80% of institutional investment in the country is accounted for by PE investors;

2018 saw investments of USD 7.2 billion, the highest in a decade;

Foreign funds with USD 16.7 billion worth of investments accounted for over 59% of the total real estate investment;

With 50% of the total investment, commercial assets observed highest amount of investments;

Warehousing and logistics sector have become increasingly popular over the last 2 years. fiinews.com