Opportunity Outlook

Strong Economic growth has augured well for the Indian Real Estate AND IT has the Potential to grow from the current USD 12 BN TO USD 45-50 BN in just five years, A Phenominal growth rate of 30 percent over The Present Level.

Residential Complexes

The Country’s residential property market constitutes almost 75 per cent of the real estate market in India. The country is witnessing a housing boom for the fifth successive year despite the marginal increase in the home loan rates. Further, the realty boom across the country has triggered the demand for the new-age residential complexes and townships even in non-metros and smaller towns.

As per the Tenth Five Year Plan, there is a shortage of 22.4 mn dwelling units in the country out of which more than 70 per centof the demand is from the middle and low income brackets.

The Government's habitat policy aims to eradicate housing shortages by the year 2012 and for which an investment of USD 800 bn is estimated.

It is estimated that over 100 residential townships, each with over one hundred acres of land, are in various stages of planning and development across the country.

Commercial Complexes

It is estimated that 80 per cent of the demand in the commercial segment is driven by the demand for quality structures from the growing IT, ITES and BPO sector and in 2005-06, the IT and BPO sectors have generated a demand for over 20 mn sq ft. of office space.

The demand in real estate sector from India Inc across various sectors is likely to ensure sustained long-term demand at over 14.5 per cent per annum approximately 20 mn sq. ft. per annum over the next 3 years

Retail

India has the largest retail density in the world.

The organised retail space is expected to go up to about 100 mn sq ft. by 2010 giving rise to more than 600 malls in the country. It is estimated that an additional 46 mn sq ft. for malls and multiplexes is being added in India out of which 32 mn sq ft. is spread over seven major Indian cities.

As many as 45 malls with over 9.5 mn sq ft. of retail real estate is expected to come up in cities of Jaipur, Chandigarh, Ludhiana, Nagpur, Baroda, Surat, Kochi by end of 2007.

With the mall mania and new age entertainment options gaining popularity across the country, catering to this segment, the number of multiplexes is expected to rise to 200-250.

Hotels

According to World Travel and Tourism Council, India is poised to emerge as the second fastest growing tourism economy in the world during 2005-14.

Limited hospitality construction so far has restricted the choice of the globe trotting foreign tourists visiting India and has also hindered the growth of the tourism industry.

To synchronise with the Government's proactive tourism policy and the growing demand for quality hotels, realty developers are estimated to be constructing hotels and augmenting present capacity by adding over 40,000 rooms, which are likely to come up by 2007-08 with the hospitality sector likely to receive investments between USD 25-350 mn in 2006-07.

To bridge the demand-supply gap, 155 hotels are likely to come up in the country.

FDI entry and realty funds are further providing impetus to the real estate sector. It is estimated that of the total FDI inflows, the realty sector is expected to capture a share of 18 to 20 per cent with venture fund flows expected to touch a whopping USD 7-8 bn over the next 18-30 months.