9/23/2014 Realty Sector has potential to increase Completed Space to more than 8bn sq.ft: CBRE–AMCHAM Report

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Realty Sector has potential to increaseCompleted Space to more than 8bn sq.ft: CBRE–AMCHAM ReportIndia 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’sinfrastructure base, and is one of the largest generators of economic activity. It stimulates demand inmore than 250 ancillary industries, and serves as a propeller for private sector involvement in the growthof the country’s built environment, according to the CBRE–AMCHAM report, India Real Estate MarketScenario.According to CBRE research[1], long-term prospects appear positive for the realty sector, with apotential increase in completed space from 3.6 billion sq. ft. in 2013–14 to nearly 8.2 billion sq. ft. by2025. This is likely to generate significant employment opportunities to the tune of almost 17 million by2025—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 effectiveutilization of potential growth opportunities and implementation of relevant policy measures to resolvebottlenecks plaguing the sector.Commenting on the findings of the report, Mr. Anshuman Magazine, Chairman and Managing Directorof CBRE, South Asia Pvt. Ltd., said, “Looking ahead, much of the realty revival in 2014 will depend onthe implementation of the recently announced economic policies. Sentiments are not expected to improvebefore the second half of 2014. A clear, forward looking and reform-oriented economic policy by thenew government might trigger growth by the second half of the year.”Mr. Ajay Singha, Executive Director, Amcham India stated “The burgeoning importance of the realestate sector lies in its significant contribution in the development of India’s infrastructure base. TheGovernment of India is taking several steps to boost growth in the real estate sector as that would helpcreate employment and improve the country's economy as well. The sectoral outlook put forward by thisreport would prove very useful for studying the overall Indian real estate market. We look forward towork with CBRE again for such initiatives.”The major demand drivers for India’s real estate market have been sustained economic growth, largescale urbanization, expansion of the services industry, increased disposable income, and the growingrecognition of the sector as a conventional investment asset class. Rapid urbanization has offeredtremendous 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 commercialreal estate across the country. A perceived increase in household income is expected to further fuelconsumption, 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 roleplayed by the real estate sector in the country’s economy, as well as the sector’s contribution in attractinginvestments. Apart from a topical presentation on the realty sector’s major asset classes across leadingcities, along with market outlooks for each, the report also briefly discusses the impact of regulatorydevelopments on the sector. Most importantly, the report presents a city-level real estate mapping of sixmajor 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, therehave been efforts from both within and without the realty sector to adopt international standards and bestpractices, while promoting transparency and fair practices to align industry dynamics with consumerexpectations. Consequently, the real estate landscape of India has witnessed radical transformation, with

9/23/2014 Realty Sector has potential to increase Completed Space to more than 8bn sq.ft: CBRE–AMCHAM Report

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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 actualimplementation of these policies by the new government.”