After the 2013 slump, the India real estate sector is back on a growth path. As per a recent report released by JLL and FICCI, strong economic fundamentals, proactive reforms and the use of technology will continue to boost the sector for next 2-3 years.
The report titled “Future Of India Real Estate: Deciphering the Mid-term Perspective” was released on at the 12th edition of FICCI Real Estate summit held on Sept. 4. The report mainly analyses the drivers and challenges which will face the sector in the next 2 to 3 years.
The report puts special emphasis on rapid urbanization saying that it will offer significant opportunities for real estate and infrastructure development in Indian cities. The report added that the recovery from the slump as well as from the effects of demonetization and GST is now reflecting in 2018 Q1 GDP which shows an impressive 8.2% growth.
“The sector has been through a bumpy ride in the last couple of years, but the environment is changing and the sector is back in the spotlight with key indicators pointing at the revival of Indian real estate,” SME Times quoted Sanjay Dutt, Chairman FICCI Real Estate Committee, as saying.
Below are the key findings of the report:
- At present, India’s Grade A office real estate stands at a massive 530 mn sq ft and this is likely to surpass 700 mn sq ft by 2022.
- While IT continues to occupy the maximum office space, co-working has almost doubled in H1 2018. The co-working sector is likely to drive the demand in office markets to a large extent, in the medium term.
- In the residential real estate market, developers are inclining towards compact homes. Launches within the price range of INR 40 lac were the highest during 2017 and in H1 2018.
- To cut back on to the cost of construction so as to fit under the affordable housing bracket, developers are resorting to cost-effective material and process like Reinforced concrete (RCC) frames, precast reinforced concrete (RC) planks, and prefab technology.
- Apart from the conventional sectors, we will see the emergence of alternative sectors (senior living) and greater demand from sophisticated logistics in the warehousing space.
- There is a need to treat the unorganized and haphazard student housing sector as a facilitator for the education sector. The market size of this segment is expected to increase at a whopping 38% CAGR until 2020, to INR 2,400 cr.
To read the complete report, click here.