Size of the Industry | The size of the real estate industry in India is estimated to be around US$ 12 billion. |
Geographical distribution | Mumbai, Bangalore, Chennai, Pune, Hyderabad |
Market capitalization | In the year 2004 Indian Real Estate Industry contributed 6.5% to the total GDP growth. |
History
The Indian Real Estate Industry in the country is one of great importance and according to the report of the Technical Group on Estimation of Housing Shortage, as estimated there was a shortage of 26.53 million houses during the Eleventh Five Year Plan (2007-12) which provides a big investment opportunity. In 2010 India has lead the pack of top real estate investment markets in Asia according to a study by PricewaterhouseCooper (PwC) and Urban Land Institute, a global non-profit education.For example, Ansal Properties have several residential projects in cities such as Jodhpur, Ajmer, Jaipur, Panipat, Kundli and Agra. Omaxe has planned around 40 residential and integrated township projects in Tier-II and Tier-III cities, majority of them in Uttar Pradesh, Punjab, Madhya Pradesh, Rajasthan and Haryana. According to latest analysis released by the Department of Industrial Policy and Promotion (DIPP), housing and real estate sector including cineplex, multiplex, integrated townships and commercial complexes, etc, attracted a cumulative foreign direct investment (FDI) worth US$ 8.4 billion from April 2000 to April 2010 and even the sector witnessed FDI amounting US$ 2.8 billion in the fiscal year 2009-10.
Brief Introduction
Indian Organized Retail Market is accelerating with players like WalMart, Bharti, and Reliance etc. which stepped up the demand for real estate. According to analysts, a price index must be incorporated for the housing market to track price movement. And even the government must ensure that there is no shortage of funds.
Recent harbinger, the Securities Exchange Board of India is permitting Real Estate Industry's mutual funds in both private and public sector which would go in a long way in attracting funds from small investors emphasizing certain return. Another impediment that can be eased on the discretion of government is the existing tax laws and other complex regulations relating to multidimensional real estates such as industrial parks and SEZs.
Government of India has proposed to achieve 9.0% GDP growth during the Eleventh Plan period and to achieve growth adequate infrastructure is the most basic requirement. To overcome the current constraints of insufficient modern infrastructure, the government is developing a program for infrastructure investment through both public and private sectors, and expects to more than double public investments from 1.2% of GDP in FY07 to 2.8% by FY12. Indian Real Estate Industry's favorable demographics, rising purchasing power, availability of cheap finance, professionalism and reforms initiated by the government are some of the major drivers of this spectacular growth.
The burgeoning outsourcing and IT/ITES industry had contributed to the demand for quality office space as with most of the blue-chip MNC's setting shop in the country. Today the estimated demand for IT/ITES Industry alone is expected to be 150 million sq ft of space across the major cities in the year 2010. While in residential segment, availability of easy home finance and rising purchasing power has driven the growth. Builders today are launching high-end, lifestyle residential products to cater to the growing bunch of high net worth individuals. In residential sector there is housing shortage of 19.4 million units out of which 6.7 million are in urban India.
Market capitalization
In the year 2004 according to government projections for Indian Real Estate Industry contributed 6.5% to the total GDP growth. Indian Government is pushing harder for higher GDP growth targets and so the jobs in India are expected to be on the constant rise. According to industry analysis the estimation of the Real Estate Industry has been growing at 33 % CAGR and could be a $50 billion industry in the next four years. The improvement has been noticed by all the major sectors of the industry such as commercial, residential, retail, industrial, hospitality and healthcare.
Size of the industry
India today is the second fastest-growing economy in the World. The Indian construction industry is been playing a major role in overall economic development of the country, growing at over 20% CAGR over the past 5 years and contributing ~8% to GDP. In 2005, the sector generated around 31 million jobs. The size of the Indian Real Estate Industry is estimated to be around US$ 12 billion and this figure is growing at a pace of 30% since few years. |
Top leading Companies
- GMR Group is a business house of 2,500 crore focused on infrastructure development as a key growth driver for India
- The DLF Group one of the leading company in India's real estate industry
- The Salarpuria Group is an ISO 9001:1000 company with offices based in Bangalore, Kolkata and Delhi
- The D.S. Kulkarni Group of Companies which enjoys a commanding presence in the housing sector in Pune and Mumbai.
- Rishi Ventures with 9 years of market stand has impressive track record.
- DHFL (Dewan Housing Finance Corporation Limited) founded in 1984 by Late Shri Rajesh Kumar Wadhawan with a motto to provide financial access to the lower and middle income segment of the society.
- Janapriya Engineers Syndicate started in the year 1985.
- City Square Enterprises Pvt. Ltd. established in 1969 which is one of the leading realtors and pioneers in development of Urban and Suburban locations across the Nation.
Employment Opportunities
Indian Real Estate Industry has opportunities for employment in commercial banks, saving associations, insurance companies, mortgage bankers, consulting firms, real estate developers, property management firms, and residential or commercial and industrial brokerage. Employment opportunities created by the Real Estate Industry makes it the second highest employment generator in India, only after agriculture. Hundreds of subsidiary industries are dependent on the real estate operations. Graduates can opt for careers such as Entrepreneurs, Asset Managers, Project Managers, etc.
Latest developments
- In 2010 the Private equity fund IL&FS Investment Managers (IIML) have planned to invest US$ 300 million in real estate and urban infrastructure projects.
- Recently Godrej Group's real estate company, Godrej Properties and Frontier Home Developers has planned to develop a residential project in Gurgaon. It would be a first residential project in the national capital region (NCR) for Godrej Properties.
- Shristi Infrastructure Development Corporation would invest US$ 444.7 million over the next three years in seven small cities in West Bengal, Tripura and Rajasthan.
- Ansal Properties & Infrastructure Ltd had planned to invest about US$ 330.8 million over the next three years.
- 70% of foreign investors in India are making profits as the Real estate investments in India yield huge dividends.
- The relaxed FDI rules implemented by Government of India has invited more foreign investors and Indian Real Estate Industry seems to be the most lucrative ground at present. Such friendly revised investor policies allowed foreigners to own property, and dropped the minimum size for housing estates built with foreign capital to 25 acres (10 hectares) from 100 acres (40 hectares).
- Indian real estate sector is on boom and this is the right time to invest in property in India to reap the highest rewards.
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