Real Estate As A Business

The real estate sector is amongst the most globally accepted sectors. The Real estate sector consists of four sub sectors - retail, housing, commercial and hospitality. 

The expansion of this sector is synonymous to the growth of the corporate environment and the rising demand for work space and semi-urban and urban accommodations. The building and construction industry is third amongst the 14 main sectors in terms of indirect, direct and induced effects in the various sectors of the economy.

It is also anticipated that this business sector will gain more non-resident Indian (NRI) investments in the longer run. Bengaluru is said to be the most favored property investment region for NRIs, along with Pune, Ahmedabad, Goa, Chennai, Dehradun, and Delhi.

Market Size

The Real estate sector in India will expand to a market size of US$ US$ 1 trillion by 2030 from US$ 120 billion in 2017 and by 2025 it will contribute to approximately 13 percent of the country’s GDP. Hospitality, retail and commercial real estate are additionally emerging significantly, offering the much-needed infrastructure for the country’s growing needs.

There has been a high demand of office space in sectors like IT and ITeS, consulting, retail and e-commerce recently. The office space is anticipated to cross 100 million square feet in the top eight cities during 2018-20.

Investments/Developments

The Indian real estate sector has seen massive growth recently with a rise in demand for office and residential spaces. Venture Capital and Private Equity investments have reached US$ 4.1 billion and will grow exponentially in 2019. Institutional investments in the country’s real estate are expected to cross US$ 5.5 billion for 2019, the maximum in a decade.

As per the data are given by Department of Industrial Policy and Promotion (DIPP), the construction sector in India has equity inflows from Foreign Direct Investment (FDI) ranging to US$ 24.87 billion in 2018 and the figures have risen in 2019.

Government Initiatives

The Government of India and the state governments of respective states have taken many initiatives to promote the growth in the sector. The Smart City Project, which includes a plan to develop 100 smart cities and this, is a great opportunity for the real estate market.

The Securities and Exchange Board of India (SEBI) has approved for the Real Estate Investment Trust (REIT) platform which will aid the investors to invest in the country’s real estate market. It creates an opportunity worth Rs 1.25 trillion in the Indian market in the coming years. As a response to a progressive and more well-informed consumer market, Indian real estate developers have transformed their businesses and taken up fresh challenges. The most important change is the change from family-owned businesses to more of a professionally managed one. With the rising need for managing multiple projects at a time, Real estate developers are investing in centralized developments and hiring qualified professionals in work areas like architecture, project management, and engineering.

With the increased flow of FDI into Indian real estate, it promotes transparency. Developers wish to attract funding and so are transforming their management and accounting systems to adhere to the due diligence standards.