The Indian Real Estate has reached a point where the time is right to get into Residential, Commercial and Hospitality property developments as these segments are offering great opportunity to yield greater results in the real estate sector.
The demand for residential is coming from two main sources Patient high net worth investors (HNIs) and realty funds that hitherto who are currently dealing with only Residential Projects , which is drawing significant examples from global private equity firm Blackstone Group, which has over the last decade invested $3 billion into commercial real estate in India. Its canopy properties include Express Towers at Nariman Point in Mumbai. The investment also included a clutch of office space in Bangalore, which it owns in partnership with property development company Embassy Group. Other investors, who, for the most part, took their eyes off commercial assets in the last decade, are now starting to show interest too. A case in point is the Canada Pension Plan Investment Board, which recently tied up with the Shapoorji Pallonji Group to jointly purchase commercial assets in India.
Despite strong fundamentals backing the residential real estate, the segment is highly influenced by economic cycles. Owing to global meltdown, the residential real estate market in India too witnessed an astounding fall in demand and capital values, between first half of 2015 and first half of 2015. However, the sector experienced a pickup in demand during the second half of 2015 across major cities mainly attributed to improvement in economy. Residential projects across cities saw several new mid-income housing projects being launched by developers to attract potential buyers. Demand for houses mounted as the global economy improved bringing back financial confidence to the home buyers along with low interest rates. End-users, who had put their purchasing plans on hold due to the fall in affordability levels and job-related uncertainties, started booking houses.
Improvement in demand also brought back the construction activity to back on track. CRISIL Research expects around 668 million square feet of residential supply to be constructed between 2014-15 in top 10 cities (Mumbai, NCR, Bengaluru, Chennai, Kolkata, Ahmedabad, Kochi, Chandigarh, Pune and Hyderabad). These top 10 cities account for around 15-20 per cent of overall supply in urban India.
The commercial office space in India has evolved significantly in the past 10 years due to change in business environment. The growth of commercial real estate has been driven largely by service sectors, especially IT-ITeS. Previously commercial properties were concentrated towards CBD (Central Business District) areas in large cities. However, with the emergence of IT-ITeS, which had huge office space requirement, commercial development started moving towards city suburbs. It resulted in multifold development of city outskirts and suburbs like Gurgaon near New Delhi, Bandra and Malad in Mumbai, and the Electronic city in Bengaluru. In addition, over the last 10 years, locations such as Bengaluru, Gurgaon, Hyderabad, Chennai, Kolkata and Pune have established themselves as emerging destinations for commercial development, which are competing with traditional business destinations such as Mumbai and Delhi. Tax sops on the profits of IT-ITeS companies also led to stupendous development of IT Parks and SEZs.
India’s hospitality industry has enjoyed robust growth over the past few years buoyed by a benign economic and political environment. Increase in domestic, business and leisure travel has benefited hotels in India. Rising incomes, higher weekend trips and increased access to travel-related information over the Internet have propelled growth in hospitality. Premium segment hotels are more prominent in major business destinations in India and are dominant in popular tourist destinations like Goa, which attracts a lot of foreign clientele.
Gurgaon, Ahmedabad and Goa to witness the highest growth in room inventory The premium segment room inventory is expected to increase at a CAGR of 9 per cent from 2014 to 2020 across Mumbai (North and South), NCR, Kolkata, Chennai, Bengaluru, Hyderabad, Pune, Ahmedabad, Goa, Jaipur, Agra and Kerala. Gurgaon, followed by Ahmedabad, tops the growth in room inventory with a CAGR of 31 per cent and 27 per cent, respectively. In absolute terms, North Mumbai, closely followed by Bengaluru, will see the maximum room additions.
In light of these developments, IDE a leading business information company is creating a platform gathering up to 131 Developers, Interior Designers, Architects and Procurement Heads. The 9th Edition Design Mission India 2015 takes place on the 23rd and 24th September in Hyatt Regency Gurgaon and 29th, 30th September and 01st October 2015 at the Marriott Resort and Spa as well as Deltin Royale (Cruise). National Real Estate Development (NAREDCO) has confirmed their support as an Association Partner to the forum. NAREDCO was established as an autonomous self-regulatory body in 1998 under the aegis of Ministry of Housing and Urban Poverty Alleviation, Government of India.
The President of NAREDCO, Sunil Mantri emphasized the need for a platform that provides a great source of up to date information that offers the Real estate new markets and exposure. He also highlighted, “National Real Estate Development Council is very pleased to support the 9th Edition Design Mission India as an Association Partner. Initiatives like these are a perfect opportunity to promote the interests of the Indian Real Estate worldwide, thus allowing maximum networking with colleagues, partners and industry leaders.”
The forum is also supported by Hospitality Purchasing Manger’s Forum (HPMF), Eco Construction, EPC World, Project Monitor, Solar Quarter, In AWE towards green, and CW interiors.
Ravi Kumar, Director at IDE highlighted: “India is such a huge and upcoming market that every organisation that is venturing in is assured business for the next 20 years. With India’s vision to develop Smart cities 2020 and the rising tourism this continent is seeing, the Real Estate Industry is experiencing a boom and it becomes necessary for each one of them to tackle the rising demands keeping up the brand standards and ensuring delivery on time by sourcing from international markets in order to bring ROI for the client. Each of these Real Estate buyers is pre-qualified for their ongoing or upcoming 400+ projects along with buying requirements to meet in a business-focused environment to establish lucrative business relationships.”
The post Blackstone Group and Patient high net worth investors to boost Indian Real Estate sector appeared first on EPC World.