The Indian real estate sector has witnessed high growth in recent times with the rise in demand for office as well as residential spaces thanks to the growing population. Retail, hospitality, housing and commercial real estate are growing significantly, providing the much-needed infrastructure for India's growing needs.
Investments in the industry
Private equity and debt investments in India's real estate sector grew 12 per cent year-on-year to US$ 4.18 billion across 79 transactions in 2017. In 2017, M&A deals worth US$ 3.26 billion were made in India’s real estate sector alone. Private equity investments in Indian retail assets increased 15 per cent in CY 2017 to reach US$ 800 million.
Sectors such as IT and ITeS, retail, consulting and e-commerce have registered high demand for office space in recent times. The office space absorption in 2017 across the top eight cities amounted to 18 million square feet (msf) as of September 2017. In 2017, new retail space of 6.4 million has finished and supply of around 20 mn sq ft is expected in 2019.
Projections for the industry
India is expected to witness an upward rise in the number of real estate deals in 2018, on the back of policy changes. The Housing sector is expected to contribute around 11 per cent to India’s GDP by 2020. In the period FY2008-2020, the market size of this sector is expected to increase at a Compound Annual Growth Rate (CAGR) of 11.2 per cent. The Indian real estate market size is expected to reach USD 180 billion by 2020.