Trade Analytics
Real Estate
The Indian real estate market size is expected to reach US$ 180 billion by 2020.

Indian Real Estate Industry Analysis

Latest update: February, 2018

Scenario: Few large developers with a pan-India presence dominate the market, operating model has shifted from sales to a lease & maintenance

Key Drivers: Rapid growth in services sectors: IT/ITeS, BFSI & Telecom, Rising demand from MNCs, Demand for office space in Tier 2 cities

Notable Trends: Mumbai, NCR & Bengaluru account for 60 per cent of total office space demand in India as of 2017, the office space absorption in 2016 across the top eight cities amounted to 34 million square feet (msf) with Bengaluru recording the highest net absorption during the year, business activity shifting from CBDs to SBDs, Tier 1 to Tier 2 cities

Note: MNC - Multinational Corporation, BFSI - Banking, Financial and Insurance Services, CBD - Central Business District, SBD - Special Business District, NCR - National Capital Region
Source: Cushman and Wakefield

Upcoming mall supply across top 7 cities

Scenario: NCR & Mumbai are by far the biggest hospitality markets in India, followed by Bengaluru, Hyderabad & Chennai, besides hotels, the hospitality market comprises serviced apartments & convention centres

Key Drivers: A robust domestic tourism industry, the increasingly global nature of Indian businesses boosting business travel,tax incentives for hotels & higher FSI, expansion of physical infrastructure during the 12th Five Year Plan

Notable trends: Serviced apartments appear particularly attractive within the hospitality space, government initiatives to promote tourism in Tier 2 & Tier 3 cities is generating significant demand for hotels in such cities, especially for budget hotels

Note: FSI - Floor Space Index
Source: Cushman and Wakefield

Upcoming mall supply across top 7 cities


Last Updated: February, 2018

India's real estate market is expected to reach US$ 180 billion by 2020 from US$ 126 billion in 2015. Emergence of nuclear families, rapid urbanisation and rising household income are likely to remain the key drivers for growth in all spheres of real estate, including residential, commercial and retail. Rapid urbanisation in the country is pushing the growth of real estate. More than 70 per cent of India’s GDP will be contributed by the urban areas by 2020. India jumped 13 spots in Knight Frank’s Global House Price Index to reach 9th position in Q2 2017. Private equity and debt investments in Indian real estate increased to US$ 4.18 billion in 2017, compared to US$ 3.73 billion 2016. Investments in retail projects in tier 1 and tier 2 cities reached US$ 6.19 billion from 2006-17. Office space absorption in India crossed 42 million square feet in 2017.

The Government of India has been supportive to the real estate sector. In August 2015, the Union Cabinet approved 100 Smart City Projects in India. The Government has also raised FDI limits for townships and settlements development projects to 100 per cent. Real estate projects within the Special Economic Zone (SEZ) are also permitted 100 per cent FDI. Government of India’s Housing for All initiative is expected to bring US$ 1.3 trillion investments in the housing sector by 2025. Under Union Budget 2018-19, Pradhan Mantri Awas Yojana (PMAY) (Gramin) was allocated Rs 33,000 crore (US$ 5.10 billion) while the urban programme of the scheme was allocated Rs 31,500 crore (US$ 4.87 billion). The scheme is expected to push affordable housing and construction in the country and give a boost to the real estate sector. The government has also released draft guidelines for investments by Real Estate Investment Trusts (REITs) in non-residential segment.

Sectoral Presentation (February, 2018)

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