







 25
CAGR: 20.1%

Fourth largest sector in terms of FDI FDI in the sector is estimated to grow to
inflows 4 USD25 billion in 10 years

FY2012 FY2022

FDI Inflows (USD billion)

CAGR: 2.4% 600

377 The number of Indians living in urban

Rapid urbanisation bodes well for the
areas will increase from the current 377
sector
million to about 600 million by 2031
2011 Policy
2031 support
Urbanisation (in millions)

CAGR: 6.1% 649.5

360.0 India construction market is expected to

India’s construction market is expected to
more than double to USD649.5 billion by
be the world’s third largest by 2020
2020 from USD360 billion in 2010

2010 2020
Construction Market

Source: Ministry of Tourism, Census 2011, Aranca Research

2010–11 Growing
Growingdemand
demand Attractive opportunities 2020E
• Demand for residential properties • Growing requirements of
Market has surged due to increased space from sectors such as Market
size: urbanisation and rising household education and healthcare size:
USD55.6 income USD180
billion • Growth in tourism providing billion
• Growing economy driving demand opportunities in the hospitality
for commercial and retail space sector

Advantage
India
Increasing Investments Policy support
• The engineering sector is delicensed;
• FDI in real estate of more than • 100 per cent
Allocation ofFDI is allowed
USD2.8 in for
billion therural
USD21.8 billion between April sector for FY14 budget
housing
2000 and November 2012
•• Due government
The to policy support,
has there wasFDI of
allowed
• During April 2012–January 2013, cumulative FDI of USD14.0 billion
up to 100 per cent in development into
the real estate sector accounted the sector over April 2000
projects for townships and – February
for 8.8 per cent of total FDI inflows 2012, making up 8.6 per cent of total
settlements
into India FDI into the country in that period

Source: BMI (Business Monitor International), Department of Industrial Policy and Promotion, Aranca Research
Notes: FDI - Foreign Direct Investment; 2020E - Estimate for 2020
 • Fragmented market with few large players
• Absorption rate of new residential units across six key cities to
Residential space increase at a CAGR of 7 per cent to 251 million sq ft in the next
two years

• Few players with presence across India

• Of a total supply of 607 million sq ft of office space planned in 10
Commercial space major cities, around 229 million sq ft would come up during 2012–
14

• FDI in multi- brand retail to boost demand

• Fragmented market with few national players
Real estate sector Retail space
• Of a total planned supply of 81 million sq ft across major cities,
around 44 million sq ft would come up during 2012–14

• A competitive market with many players

Hospitality space • Over 121,000 hotel rooms in the country as of 2011
• The hotel industry grew 13 per cent during 2011–12

• The government has formally approved 577 SEZs*

SEZs
• Majority of the SEZs are in the IT/ ITeS sector

Source: Cushman and Wakefield, Knight Frank, CRISIL, Aranca Research

Notes: SEZ - Special Economic Zone. IT - Information Technology, ITeS - Information Technology Enabled Services, * - As of March 2013
Real estate contributes about 5 per cent to India’s GDP Market size of real estate in India (USD billion)

The total revenue generated in FY11 stood at USD66.8

billion 66.8
CAGR: 10.0%
55.6
53.3
50.1

FY08 FY09 FY10 FY11

Source: BMI, Aranca Research

Note: CAGR - Compounded Annual Growth Rate
The urban housing shortage is estimated at 18.8 million in Urban-rural housing shortage (million)
2012
47

The housing shortage in rural India stood at 47.4 million as

of 2012 34
30 26
27 27
The housing shortage in urban and rural India will be 25
around 21.7 and 19.7 million units respectively in 2014 18 19 21 19 22 20
15

Significant increase in real estate activity in cities like

Indore, Raipur, Ahmadabad, Jaipur and other two-tier cities;
this has opened new avenues of growth for the sector
2001 2005 2007 2008 2010 2012 2014E

Urban Rural

Source: Ministry of Housing and Urban Poverty Alleviation,

RBI, CRISIL, Aranca Research
Note: E - Estimates
 Demand projections across top 7 cities (‘000 units)

A localised, fragmented market presents 710

opportunities for consolidation 600
Scenario
Few large, pan-India players such as DLF and 500
Unitech 350 410

Rapid urbanisation
2010 2011 2012 2013 2014
Rise in the number of nuclear families
Key drivers Easy availability of finance
Repatriation of NRIs and HNIs
Demand analysis of top 7 cities (‘000 units) 2010-14

830 800
Demand to grow at a CAGR of 19 per cent
between 2010 and 2014 - 40 per cent of this from
Tier 1 cities 300
Notable Trends
Notable At 3x to 4x, demand-supply gap is highest in the 220 180 160 160
Trends low and mid income segments
Increase in real estate projects in two-tier and

Chennai
NCR
Mumbai

Pune

Bengaluru

Hyderabad
Kolkata
three-tier cities
Source: Cushman & Wakefield, Aranca Research
Notes: NRI - Non-resident Indian; HNI - High Net-worth Individual
 Demand projections across top 7 cities (million sq ft)

Few large developers with a pan-India presence

dominate the market 44
Scenario 39
42
Operating model has shifted from sales to a lease- 36
and-maintenance 33

Rapid growth in services sectors: IT/ITeS, BFSI 2010 2011 2012 2013 2014
and Telecom
Key drivers Rising demand from MNCs Demand analysis of top 7 cities (million sq ft) 2010-14
Demand for office space in Tier 2 cities

39 38 36
30
Mumbai, NCR and Bengaluru account for 46 per 25
22
cent of total office space demand in India 10
Demand growth projected to be the highest in Tier
Notable Trends
Notable 2 cities such as Kolkata and Chennai during 2010-
Bengaluru

Chennai
Mumbai

NCR

Hyderabad

Pune

Kolkata
Trends 14
Business activity shifting from CBDs to SBDs, Tier
1 to Tier 2 cities
Source: Cushman & Wakefield, Aranca Research
Notes: MNC - Multinational Corporation, BFSI - Banking, Financial and Insurance Services;
CBD - Central Business District, SBD - Special Business District, NCR - National Capital Region
 Demand projections across top 7 cities (million sq ft)

Currently, retail accounts for a small portion of the 10

Indian real estate market
Scenario Organised retailers are few, and the organised
retail space is mostly developed by 7
residential/office space developers 5
4
3

2010 2011 2012 2013 2014

Booming consumerism in India
Organised retail sector growing 25-30 per cent
Key drivers annually Demand analysis of top 7 cities (million sq ft) 2010-14
Entry of MNC retailers
8
7
6

NCR accounts for about 30 per cent of the total 3

2 2 2
mall supply
About 53 per cent of demand for total mall space in
Notable Trends
Notable Trends
Notable India expected to come from top seven cities

Chennai
Mumbai
Bengaluru

NCR

Pune

Hyderabad
Kolkata
Trends Demand for retail space on high streets is quite
high, as well Increase in FDI limit for multi-brand
retail will lead to significantly higher demand for
retail space
Source: Cushman & Wakefield, Aranca Research
 Demand projections (no of rooms)

NCR and Mumbai are by far the biggest hospitality

markets in India, followed by Bengaluru, 43,828
Scenario Hyderabad and Chennai
32,660 35,503
38,789
Besides hotels, the hospitality market comprises
serviced apartments and convention centres

A robust domestic tourism industry 2010 2011 2012 2013

The increasingly global nature of Indian
Key drivers businesses boosting business travel Demand analysis of top 7 cities (no of rooms) 2010-14
Tax incentives for hotels and higher FSI
10,519 10,519

4,821
3,945 3,506 2,630
Serviced apartments appear particularly attractive 1,315
within the hospitality space
Notable Trends
Notable Government initiatives to promote tourism in Tier 2

Chennai
Mumbai
NCR

Hyderabad

Bengaluru

Pune

Kolkata
Trends and Tier 3 cities is generating significant demand
for hotels in such cities, especially for budget
hotels
Source: Knight Frank India, Aranca Research
Notes: FSI - Floor Space Index
 Growth in tourism Urbanisation

Epidemological
Growth drivers Growing economy
changes

Easier financing Policy support

The Indian economy experienced robust growth in the past Real GDP growth rates of major economies
decade and is expected to be one of the fastest growing
economies in the coming years 12%
10%
Demand for commercial property is being driven by the 8%
country’s economic growth
6%
4%
2%
0%
2010 2011 2012F 2013F 2014F 2015F 2016F 2017F
China
India
Advanced economies
Emerging and developing economies

Source: IMF, Aranca Research

The increasing urban population is expected to cross 600 Population breakup of India (million)
million by 2031
1,470
Urbanisation and growing household income is driving
1,210
demand for residential real estate and growth in the retail
sector 856 1,040

600

377
220 290

1991 2001 2011 2030E

Urban Population Total Population

Source: Indian Census, Knight Frank,

Mckinsey estimates, Aranca Research
Note: E - Estimate
In 2012, 6.6 million foreign tourists are estimated to have Foreign tourists arriving in India (million)
arrived in India
6.6
CAGR: 5.3% 6.3
The number of foreign tourists arriving in India expanded at 5.8
a CAGR of 5.3 per cent during 2007–12 5.1 5.3 5.2
4.4

2006 2007 2008 2009 2010 2011 2012

Source: Ministry of Tourism, Aranca Research

India is estimated to have earned about USD17.7 billion Foreign exchange earnings from tourism in India
from the tourism sector in 2012 (USD billion)

The growing inflows from tourists is expected to provide a 17.7

CAGR: 10.6%
fillip to the hospitality sector 16.6

14.2
10.7 11.7 11.4
8.6

2006 2007 2008 2009 2010 2011 2012

Source: Ministry of Tourism, Aranca Research

Note: H1 2012 - Figures up to 2012 (Jan-June )
Total FDI in the real estate sector during April 2000– FDI in real estate as a per cent of total FDI in India
January 2013 stood at around USD22 billion
11.1 % 11.0 %
Currently, real estate and construction accounts for over 22 10.3 %
per cent of total FDI, up from less than 4 per cent in 2006 8.9 %
7.4 %
6.3 % 7.1 %

2.7 % 3.0 %

0.7 %

2006 2007 2008 2009 2010

Construction activities Real estate

Source: Dept of Industrial Policy & Promotion, Aranca Research

There have been 110 deals in the real estate space Major acquisitions in real sector in India
between 2001 and the first half of 2011
Value
The biggest disclosed deal was the acquisition of DLF Target Acquirer (USD Year
Assets’ shares by Caraf Builders for USD696 million million)

Caraf Builders DLF Assets ltd 696.5 2009

Cowtown Land
Lodha Group 513.6 2011
Dvlp Pvt Ltd

Compact Disc film

Jeff Morgan 320 2011
city
Oceanus Real
Warburg Pincus 318 2011
Estate
Indiabulls Indiabulls Property
223.1 2012
Properties Pvt Ltd Invest Trust

Embassy Property Blackstone 200 2012

Source: Cushman & Wakefield, Venture Intelligence, Aranca Research

Of the 43 private equity (PE) investments witnessed in the Top 5 PE deals in Indian real estate sector in 2012
sector during 2012, 35 had an announced value of USD1.14
billion
Investment
Investor Investee
In terms of volume, residential projects accounted for 65 per (USD million)
cent of overall investments in the sector during 2012, while
commercial projects accounted for 16 per cent Manyata
Blackstone Embassy 160.0
Business Park
Foreign funds constituted almost 80 per cent of total
investments in the sector compared with 50 per cent in 2011
APG and Group of Godrej
140.8
investors Properties
Mumbai continued to remain the hotspot for PE
investments, followed by Bengaluru and NCR Government of Singapore
Godrej
Investment Corporation 98.2
Properties
A shift in trend is evident from the fact that the maximum (GIC)
number of PE deals in the year were executed through Morgan Stanley Real
Special Purpose Vehicles (SPV) as against via both entity Supertech 91.4
Estate Investment
and SPV modes in the previous year
Baring Private Equity Bangalore-
91.4
Another major trend evident in recent times is the increasing Partners India based RMZ Corp
focus of private PE players on high-end and luxury projects

Source: Grant Thornton, Venture Intelligence, Aranca Research

100 per cent FDI permitted in real estate projects within Share of SEZ exports in total exports of India
Special Economic Zone (SEZ)

100 per cent FDI permitted for developing townships within

SEZs with residential areas, markets, playgrounds, clubs,
recreation centers, etc. 69%
74% 72% 75%
90% 88%
Exports from SEZs registered a yoy growth of 15.39 per
cent in 2011–12 and accounted for 30.6 per cent of total
exports during April–December 2012
26% 28% 25% 31%
Industry players, including realtors and property analysts, 10% 12%
are rooting for the creation of "special residential zones" FY08 FY09 FY10 FY11 FY12 FY13*
(SRZs), along the lines of SEZs
SEZ Exports Other

Minimum land requirement has been brought down from

1000 hectares to 500 hectares for multi-product SEZ and for
Source: Ministry of Commerce and Industry, Aranca Research
sector-specific SEZs to 50 hectares * - April 2012 to December 2012

For updated information, please visit www.ibef.org

 • Additional deduction of up to USD1,841 on interests payable on home loans of up to
Ease in housing USD46,032 announced in the Union Budget 2013–14
finances • To liberalise scheme of interest subversion of 1 per cent on home loan by including loans
of up to USD31,250 for houses that cost up to USD52,080

Housing for • Allocation of USD1.1 billion for Rural Housing Fund in FY14 budget
economically weaker • Allocation of USD0.37 billion for Urban Housing Fund in FY14 budget to bridge the huge
sections shortage of housing in certain urban areas

• The government has allowed FDI of up to 100 per cent in development projects for
townships and settlements
FDI
• FDI of up to 100 per cent is allowed in the hotel and tourism sector through the automatic
route

For updated information, please visit www.ibef.org

Largest real estate company
with revenues of Net land bank of
USD1.4 billion (FY13) Founded by 348 million sq. feet
Chaudhary
Raghavendra
Singh
Market capitalisation of
USD7.2 billion Alliance with
Hilton
International FY13
Building India’s largest mall USD1.4
in Gurgaon billion
Ventures into turnover
grade A office FY06
spaces USD238
Focuses on IT Parks and million
next generation malls turnover

Commenced
development of
Developed 3000 acre
DLF Cyber City,
DLF City in Gurgaon Gurgaon

Development of 22 Urban
1940 1950 1980 1990 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
colonies
Source: Company website, Aranca Research,
Notes: sq. ft. - Square Feet
Key Facts Distribution of ongoing projects by area
(as of December 2012)
Started its first project in Mumbai in 1991

National real estate developer with presence across

12 cities 18.4%

Residential
Differentiated joint development business model
resulted in a debt-equity ratio of less than one

The current potential developable area stands at Commercial

82.2* million sq ft
81.6%

Ranked one of India’s top 10 builders by

Construction World Architect & Builder Awards,
2011
Source: Company website, Aranca Research
Consolidated total income of USD173.1 million in * As on December 31, 2012
FY13

Five new projects with 4.3 mn sqft of saleable area

added to portfolio in FY13 YTD
 Revenues (USD million) Profit before taxes (USD million)

173.1 51.8
160.6
CAGR: 19.6%
CAGR: 32.8%
32.1
99.1 28.6
26.0
22.2
56.5 18.1
40.3 44.6

FY08 FY09 FY10 FY11 FY12 FY13 FY08 FY09 FY10 FY11 FY12 FY13

Source: Company website, Aranca Research

The entry of major private players in the education sector Real estate demand in education sector
has created vast opportunities for the real estate sector (seven top cities)

The top seven cities i.e. Hyderabad, Bengaluru, Mumbai,

Delhi, Pune, Chennai and Kolkata are likely to account for 2014F 16
70 per cent of total demand for real estate in the education
sector
2013F 15.5

2012F 15

2011F 14.5

2010 14

Area (million square feet)

Source: Cushman and Wakefiled, Aranca Research

NCR is expected to have the highest incremental demand Incremental demand across seven major cities
from the education sector (million sq ft)

The rising young population of India is expected to drive this NCR

4
space
3
Hyderabad Mumbai
2
1
0
Bengaluru Pune

Kolkata Chennai

Source: Cushman and Wakefiled, Aranca Research

Notes: NCR - National Capital Region
 • The healthcare sector is estimated to grow at an annual rate of 15 per cent to USD100
billion by 2015
Healthcare • India is expected to need additional 937,000 beds by 2015
• India still needs to add 3 million hospital beds to meet the global average of three for every
1,000 people

• Emergence of nuclear families and growing urbanisation has given rise to several
townships that are developed to take care of the elderly
Senior citizen housing • A number of senior citizen housing projects have been planned; the segment is expected
to grow significantly in future

• Growth in the number of tourists has resulted in demand for service apartments
Service apartments • This demand is likely to be on uptrend and presents opportunities for the unorganised
sector

Source: Fitch Ratings, Aranca Research

Foreign tourist arrivals are expected to increase at a CAGR Forecasts of foreign tourists arriving in India
of 11.7 per cent during 2012–15 (million)

The number of foreign tourists arriving in India by 2015 is CAGR: 11.7% 9.2
8.5
anticipated to be over 9.2 million 7.9

6.6

2012 2013F 2014F 2015F

Source: Ministry of Tourism, BMI, Aranca Research

Foreign exchange earnings from tourism is expected to rise Forecasts of foreign exchange earnings from
at a CAGR of 4.1 per cent during 2012–15 tourism in India (USD billion)

Foreign exchange earned is forecast to cross USD19 billion

19.9
in 2015
CAGR: 4.1%
19.0

18.1
17.7

2012 2013F 2014F 2015F

Source: BMI, Aranca Research

Note: F stands for Forecasts
The number of hotel rooms in India as of 2011 stood at Capacity of hotels in India (‘000)
121,000
443
392
50,000 new hotel rooms are expected to be added over the
339
next 4–5 years across India’s top six cities 295
262
210 241
The number of hotel beds in the country is expected to 176 197
increase to 443,000 by 2015 135 154
109 121
98

2009 2010 2011 2012F 2013F 2014F 2015F

Number of hotel rooms Number of hotel beds

Source: BMI, Cushman & Wakefield, Aranca Research

Note: F - Forecast
The Southern Indian States – Andhra Pradesh, Tamil Nadu Office market in Southern India (in million sq ft)
and Karnataka – have been the major drivers of economic
growth in India over the last decade. The three states 25 20%
together account for about 22 per cent of India’s GDP
20 16%
Nearly 45 per cent of India’s office stock is represented by
these states; over 64 per cent of the country’s IT SEZs are 15 12%
housed in this region
10 8%

Office stock in the Southern cities is projected* to grow at a

5 4%
CAGR of 8 per cent between 2012 and 2016
0 0%
Note: * - Projections by Jones Lang LaSalle 2002 2004 2006 2008 2010 2012E 2014F 2016F

Supply Net absorption Vacancy Rate - RHS

Source: Jones Lang LaSalle, Aranca Research

Net absorption rate in Southern India’s residential market is Residential market in Southern India
once again climbing up to pre-crisis peaks; during 1Q12, net (number of units)
absorption rate stood at 15.1 per cent, compared to 17.8 per
cent in 1Q08 25,000 25%

A growing migrant population due to increasing job 20,000 20%

opportunities, together with healthy infrastructure
development, is underpinning demand in the region’s 15,000 15%
residential real estate market
10,000 10%

5,000 5%

0 0%
1Q08 3Q08 1Q09 3Q09 1Q10 3Q10 1Q11 3Q11 1Q12
New launches Net absorption Absorption rate - RHS

Source: Jones Lang LaSalle, Aranca Research

The Confederation of Real Estate Developers’ Associations of India (CREDAI)
National Secretariat, 703, Ansal Bhawan,
16, Kasturba Gandhi Marg, New Delhi – 110 001
Tel: (011) 43126262/43126200
Fax: 91 11 43126211
E-mail: info@credai.org
Website: www.credai.org

Builders' Association of India (BAI)

G-1/G-20, Commerce Centre, J. Dadajee Road,
Tardeo, Mumbai – 400034
Tel: 91 22 23514134, 23514802, 23520507
Fax : 91 22 23521328
E-mail: bai@vsnl.com, baihq.mumbai@gmail.com
Website: www.baionline.in
BFSI: Banking, Financial Services and Insurance

CAGR: Compound Annual Growth Rate

CBD: Central Business District

FDI: Foreign Direct Investment

FSI: Floor Space Index

HNI: High Net-worth Individual

GOI: Government of India

INR: Indian Rupee

IT/ITeS: Information Technology/Information Technology enabled Services

MNC: Multinational Corporation

NRI: Non Resident Indian

SBD: Special Business District

SEZ: Special Economic Zone

USD: US Dollar

Wherever applicable, numbers have been rounded off to the nearest whole number
 Exchange Rates (Fiscal Year) Exchange Rates (Calendar Year)

Year INR equivalent of one US$ Year INR equivalent of one US$

2004-05 44.95 2005 45.55

2005-06 44.28 2006 44.34

2006-07 45.28 2007 39.45

2007-08 40.24 2008 49.21

2008-09 45.91 2009 46.76

2009-10 47.41 2010 45.32

2010-11 45.57 2011 45.64

2011-12 47.94 2012 54.69

2012-13 54.31 2013 54.45

Average for the year

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