Real Estate

Real Estate
•The real estate sector is second only to agriculture in terms of employment
generation and contributes heavily towards the gross domestic product (GDP).
Almost five per cent of the country's GDP is contributed to by the housing
sector. In the next five years, this contribution to the GDP is expected to rise to
6 per cent.
•India's property sector had began to improve from mid 2009 and may attract
up to US$ 12.11 billion in real estate investment over a five-year period.
•India leads the pack of top real estate investment markets in Asia for 2010,
according to a study by PricewaterhouseCoopers (PwC) and Urban Land
Institute, a global non-profit education and research institute.
•McKinsey report reveals that the average profit from construction in India is 18
per cent, which is double the profitability for a construction project undertaken
in the US.
•Key players in the sector such as Ascendas, EMAAR MGF, Salim Group, Unitech,
DLF, Ansal Properties, K. Raheja Corporation, Sobha Developers and Parsvnath
Developers.
 Government incentives
• The real estate sector is also likely to get a boost from Real Estate Mutual Funds
(REMFs) and Real Estate Investment Trusts (REITs). In fact, according to a CRISIL
paper, the REITs would have the potential to hold at least 5 per cent share of the
total global real estate market by 2010, the size of which would reach US$ 1,400
billion in the next three years.
• Foreign direct investment (FDI) into India in the real estate sector for the fiscal year
2008-09 has been US$ 12.62 billion approximately .
• FDI in the real estate sector expected to witness a US$ 21 billion increase in the next
10 years.
• SEZ Act 2006 provides major tax benefits, tax relief and single window clearance and
approval.
• Focus on urban infrastructure

Urban Reform schemes

• JNNURM
• City Challenge Fund
• Mega Cities Fund
 Present Scenario
• The country’s largest real estate developer, DLF, sold apartments worth Rs 1,000 crore in
December. This is the highest monthly sale the company has recorded in its history.

• Increasing sales are a result of many factors, besides general economic recovery like
Interest rates had came down, property prices are down by 30 per cent from the peak ,
markets are doing well, confidence in buyers .
• Per capita GDP has increased by 66 per cent in the past five years

• Favorable demographics with more than 60 per cent of population estimated to be in

the working age group (15-60) till 2050.

• Growing lifestyle spend with increased expenditure on consumer durables

• Robust and sustained macro-economic growth

• Upsurge in industrial and business activities, especially, new economy sectors

 Opportunity for growth
• IT industry
The information technology (IT) and IT-enabled services (ITES) sector alone is estimated to
require 150 million sq ft of office space across urban India by 2010. The organized retail industry
is likely to require an additional 220 million sq ft by 2010.
• Healthcare industry -
Healthcare industry expected to grow at a CAGR of 12 per cent over the next five years. The
industry was valued at US$ 38.8 billion in 2008.Healthcare BPO is a growing segment. Medical
infrastructure expanding, with one million beds to be added by 2012.Medical tourism growth
driven by low cost and high quality services.
• Education infrastructure-
• Huge market with untapped potential and low competition, Need for development of more
world-class educational institutions, Driven by knowledge-based industries, large demand for
qualified engineers, Research laboratories adding value to global outsourcing, Growing interest
of leading global educational institutions in setting up institutions in India.

• Low-cost housing