1. 9/23/2014 Realty Sector has potential to increase Completed Space to more than 8bn sq.ft: CBRE–AMCHAM Report
Realty Sector has potential to increase
Completed Space to more than 8bn sq.ft: CBRE–
AMCHAM Report
India Infoline News Service | Mumbai | September 22, 2014 14:19 IST
The real estate and construction sector plays an important role in the development of India’s
infrastructure base, and is one of the largest generators of economic activity. It stimulates demand in
more than 250 ancillary industries, and serves as a propeller for private sector involvement in the growth
of the country’s built environment, according to the CBRE–AMCHAM report, India Real Estate Market
Scenario.
According to CBRE research[1], long-term prospects appear positive for the realty sector, with a
potential increase in completed space from 3.6 billion sq. ft. in 2013–14 to nearly 8.2 billion sq. ft. by
2025. This is likely to generate significant employment opportunities to the tune of almost 17 million by
2025—providing the country with substantial socio-economic opportunities for growth. Consequently,
the contribution of the real estate sector to the economy is also expected to more than double from 6.3%
in 2013–14 to almost 13% by 2025. This projected expansion is, however, subject to an effective
utilization of potential growth opportunities and implementation of relevant policy measures to resolve
bottlenecks plaguing the sector.
Commenting on the findings of the report, Mr. Anshuman Magazine, Chairman and Managing Director
of CBRE, South Asia Pvt. Ltd., said, “Looking ahead, much of the realty revival in 2014 will depend on
the implementation of the recently announced economic policies. Sentiments are not expected to improve
before the second half of 2014. A clear, forward looking and reform-oriented economic policy by the
new government might trigger growth by the second half of the year.”
Mr. Ajay Singha, Executive Director, Amcham India stated “The burgeoning importance of the real
estate sector lies in its significant contribution in the development of India’s infrastructure base. The
Government of India is taking several steps to boost growth in the real estate sector as that would help
create employment and improve the country's economy as well. The sectoral outlook put forward by this
report would prove very useful for studying the overall Indian real estate market. We look forward to
work with CBRE again for such initiatives.”
The major demand drivers for India’s real estate market have been sustained economic growth, large
scale urbanization, expansion of the services industry, increased disposable income, and the growing
recognition of the sector as a conventional investment asset class. Rapid urbanization has offered
tremendous opportunities for real estate development, particularly for the housing segment. Additionally,
burgeoning growth in the IT/ITeS industry has been a major demand driver for the growth of commercial
real estate across the country. A perceived increase in household income is expected to further fuel
consumption, and act as a support base for the growth of organized retail real estate.
The CBRE–AMCHAM report, India Real Estate Market Scenario, attempts to present the pivotal role
played by the real estate sector in the country’s economy, as well as the sector’s contribution in attracting
investments. Apart from a topical presentation on the realty sector’s major asset classes across leading
cities, along with market outlooks for each, the report also briefly discusses the impact of regulatory
developments on the sector. Most importantly, the report presents a city-level real estate mapping of six
major urban centers of India, together with a medium to long-term outlook on each segment.
Mr. Anshuman Magazine adds, “As India continues to integrate itself with the global economy, there
have been efforts from both within and without the realty sector to adopt international standards and best
practices, while promoting transparency and fair practices to align industry dynamics with consumer
expectations. Consequently, the real estate landscape of India has witnessed radical transformation, with
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2. 9/23/2014 Realty Sector has potential to increase Completed Space to more than 8bn sq.ft: CBRE–AMCHAM Report
constantly evolving trends and developments.
“While the Union Budget 2014–15 made encouraging announcements for infrastructure, manufacturing,
and affordable housing, going forward, the sector’s growth will depend to a large extent on the actual
implementation of these policies by the new government.”
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