From a sleepy cat to a roaring tiger, the real estate sector has secured its position as not only a major employment generating sector but also as a leading contributor to the growing Indian economy, reports Rai Umraopati Ray.Updated: May 07, 2008 23:31 IST
It’s the sector that is providing a major impetus to the Indian economy. It’s an area that has provided an opportunity to millions in the country to realise their dreams. It is the space where from pharma-based entrepreneurs to publishing houses, big companies to institutions, chartered accountants to financiers, jewellers, retired army personnel and doctors are foraying and trying their luck.
The year 2007 saw the sector at USD 48 billion. This figure is expected to reach USD 140 billion by 2012 (CAGR of 21 per cent) according to one estimate. Welcome to the Indian real estate sector that proudly comes in the league of the most preferred property market among the foreign investors globally.
Says Anshuman Magazine of CB Richard Ellis, "There is no business you could do without real estate. It involves almost everything. Housing, healthcare, logistics and warehousing, mega integrated townships, airport/ports, business districts, mass housing, and education, assets and development formats are emerging in the firmament of Indian real estate.
The real estate sector is a backbone of an economy and since the Indian economy is growing at a healthy rate, the future of the sector is quite buoyant. Though the Indian property market is catching up with the markets of developed nations, the sector gives higher returns but one should keep in mind various pitfalls like currency and country risks."
The sector has welcomed new concepts, builders, construction giants and foreign investments with open arms – factors that played a major role in positioning the country on the real estate map of the world. With the initial focus on the Tier I cities, the entry of FDIs changed the face of real estate in India. Lack of space and fast rising prices soon forced the builders and investors to look at Tier II cities and in the year gone by, the focus is high on Tier III cities.
Adds Navin Bahri, Director, Uppals Group, "Being the third generation population after independence, there is immense demand in this sector in almost all its segments. With the economy booming, easier financing options available clubbed with higher disposable incomes, the money is pouring into real estate developments from across the country. Though it is high time some basic standardisation comes into the sector."
There is also a paradigm shift in the major real estate players who earlier restricted their projects to a particular region taking on a pan India role as well as foraying outside the country. IPOs on the local as well as overseas market are being used to fund these expansion plans and one could well witness a number of public issues in the future. As per reports, leading Private Equity (PE) players feel that US$10-20 billion would pour into the sector in the next three years seeing the over all development in India.
Feels S. Jaipal Reddy, Union Urban Development Minister, Government of India, "There is ample liquidity in the real estate sector and a regulatory body would be in place by the year-end."