India’s Real Estate Market Set to Contribute Over 15% to Economy with USD 5.8 Trillion Value by 2047: Naredco-Knight Frank

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    The Indian real estate market is poised to undergo a remarkable transformation, with its estimated value projected to increase more than twelvefold to USD 5.8 trillion by 2047, a significant rise from last year’s USD 477 billion. This surge in the real estate sector is expected to contribute over 15% to India’s overall economic output, according to a comprehensive report released by Naredco and Knight Frank India.

    Titled ‘India Real Estate: Vision 2047’, the report envisions the Indian economy reaching between USD 33 trillion and USD 40 trillion by the time the nation celebrates its 100th year of independence in 2047. The ambitious growth forecast stems from the steady upward trajectory of India’s real estate industry, supported by factors such as economic resilience, robust infrastructure expansion plans, alternative investment models, and strong domestic consumption.

    The residential real estate market is projected to expand significantly to USD 3.5 trillion by 2047, a substantial increase from last year’s USD 299 billion. Meanwhile, the office real estate market is set to experience remarkable growth, surging from USD 40 billion to USD 473 billion. Similarly, the warehousing market is anticipated to rise to USD 34 billion from its previous USD 2.9 billion valuation.

    The report highlights the pivotal role that real estate will play in India’s expansive economic growth over the next 25 years. Rajan Bandelkar, President of NAREDCO India, emphasized that the burgeoning economy will lead to increased demand across various asset classes, including residential, commercial, industrial land developments, and warehousing. This growth is expected to accommodate both the economy’s expansion and the increasing consumption needs of the population.

    Niranjan Hiranandani, National Vice Chairman of Naredco, attributed the upward trajectory of the Indian real estate sector to a favorable domestic economic environment, resilient economic structures, thriving infrastructure growth initiatives, alternative investment models, and robust domestic consumption patterns.

    Shishir Baijal, Chairman, and Managing Director of Knight Frank India, foresees a monumental transformation not only in the real estate sector but also in the entire Indian economy over the next quarter-century. Factors such as demographic advantages, improved business sentiments, strategic investment policies, and a government push towards high-value sectors like manufacturing and infrastructure are expected to robustly bolster India’s economic expansion.

    The report also sheds light on the consistent growth of private equity (PE) investments in the Indian real estate sector. Predictions for 2023 suggest that PE investments in this sector are on track to reach USD 5.6 billion, reflecting a year-on-year growth of 5.3 percent. With India’s GDP projected to reach USD 36.4 trillion by 2047, private equity investments in the real estate sector are estimated to surge to USD 54.3 billion, representing a Compound Annual Growth Rate (CAGR) of 9.5 percent spanning the years from 2023 to 2047.

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