India's realty market to touch $1 trillion by 2030: Survey
India's real estate market is expected to touch $1 trillion by 2030, becoming the third largest globally, a recent survey said. The survey conducted by KPMG in association with Naredco and APREA revealed that the sector is estimated to grow to $650 billion by 2025 and surpass $850 billion by 2028 to touch $1 trillion by 2030. The report was released today. Here's more.
India consistently improved its ranking in real estate since 2014
The report noted that India has consistently improved its ranking in global real estate since 2014, which has made investors confident. This is driven by emerging asset classes such as affordable housing and co-working spaces, said Neeraj Bansal, Partner and Head ASEAN corridor, KPMG India, adding, "As a by-product, average yearly contribution of 67% to Indian GDP is anticipated to almost double by 2025."
Private equity investments estimated to grow to $100bn by 2026
The report said private equity investment in India's real estate improved by 15% year-on-year in January-March 2018 reaching $3 billion and is estimated to grow to $100 billion by 2026 with Tier 1 and 2 cities benefiting the most. "India's realty sector has been struggling with unsold inventory, reducing buyers' confidence, project delays, and negative cash flows for quite some time," it noted.
Average deal size so far has crossed $150 million mark
"A number of growth-promoting regulatory developments and initiatives announced over the last two years are paving the way for strong sector growth," the report said. It further noted that $4 billion has been invested by institutional investors in 2018 with the average deal size, which has also tripled from 2016 to 2018, crossing the $150 million mark, the highest in the last five years.
Mumbai is the preferred destination of the investors: Report
Of the total investments that have come in 2018, nearly 44% are from foreign investors primarily from the US, Canada, and Singapore. Also, over 90% of the foreign investment has preferred commercial projects across Mumbai, Pune, Bengaluru, and Hyderabad. Average deal size of foreign investors is $149mn compared with domestic investors' $87mn. These domestic investors have equally preferred commercial ($959mn) and residential ($870mn) projects.
Hyderabad, Bengaluru preferred destinations of domestic investors: Report
"Overall, Mumbai has been the preferred destination attracting 53% ($2bn) of total investments," the report said. "Most of these investments have come from foreign investors. Hyderabad ($793mn) and Bengaluru ($694mn) are preferred destinations of domestic investors," it said. The report further noted that there is an underutilization of over Rs. 20 billion worth of real estate investment trust (REIT) office stocks.
