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Overview

 

Real Estate Sector

 

The Indian real estate sector is one of the fastest growing and globally recognised sectors. It comprises four sub sectors-housing, retail, hospitality, and commercial. The real estate industry's growth is linked to developments in the retail, hospitality and entertainment (hotels, resorts, cinema theatres) industries, economic services (hospitals, schools) and information technology (IT)-enabled services (like call centres) etc and vice versa. The total realty market in the country is expected to touch US$ 180 billion by 2020.

India ranks third for the most LEED (Leadership in Energy and Environmental Design)-certified space globally, with nearly 12 million sq m. The LEED system is the most widely used rating system guiding the design, construction, operations and maintenance of green buildings.

Private equity (PE) funding has picked up in the last one year due to attractive valuations and low level of bank funding to the sector. Delhi NCR alone has already attracted PE investments of Rs 80 crore (US$ 13.22 million) in first quarter of 2014.Moreover, with the government trying to introduce developer and buyer friendly policies, the outlook for the real estate sector in 2014 looks promising.

The residential segment of real estate has also seen tremendous growth in recent years owing to the continuous growth in population, migration towards urban areas, ample job opportunities in service sectors, growing income levels, rise in nuclear families and easy availability of finance. 

In the residential segment, the number of new launches in the first quarter of 2014 has increased by 43 per cent at 55,000 units across eight major cities. The Indian Green Building Council (IGBC) has joined hands with the US Green Building Council (USGBC) to strengthen their association for the next 10 years to focus on areas of knowledge exchange and work on the green building movement in India. 

Over the last two quarters, the residential property market in South Delhi has shown only marginal appreciation in capital values and rentals. This could have more to do with the recent upward revision in circle rates in various zones than anything else.

Supply and demand dynamics in South Delhi have been more or less constant, and the revision in circle rates has resulted in larger cheque amounts and lower potential for offloading cash in real estate transactions. This has, in fact, acted as a check on the anticipated price appreciation in South Delhi.