The report released Thursday here noted
that India has consistently improved its ranking in global real estate since
2014, which has instilled confidence in investors.
Mumbai: Indian real estate market is
expected to touch USD 1 trillion by 2030, becoming the third largest globally,
a recent survey said.
According to the survey conducted by KPMG
in association withe Naredco and APREA revealed that the sector is estimated to
grow to USD 650 billion by 2025 and surpass USD 850 billion by 2028 to touch
USD 1 trillion by 2030.
The report released Thursday here noted
that India has consistently improved its ranking in global real estate since
2014, which has instilled confidence in investors.
Speaking about the findings of the
report, Neeraj Bansal partner and head ASEAN corridor of KPMG in India said
this growth is driven by emerging asset classes such as affordable housing and
co-working spaces.
"As by-products of this growth, the
average yearly contribution of 67 percent to Indian gross domestic product is
anticipated to almost double by 2025 while generating employment opportunities
for over 66 million people in parallel," he added.
According to the report the private
equity investments in Indian real estate improved 15 percent year-on-year in
January-March 2018 reaching USD 3 billion and is estimated to grow to USD 100
billion by 2026 with tier 1 and 2 cities benefiting the most in future.
"Indian realty sector has been
struggling with unsold inventory, reducing buyers' confidence, delays in
projects, and negative cash flows for quite some time. However, a number of
growth promoting regulatory developments and initiatives announced over the
last two years, are paving the way for strong sector growth in the future,"
the report said.
The report further noted that USD 4
billion has been invested by institutional investors in 2018 so far with the
average deal size crossing USD 150 million mark, the highest in the last five
years.
In 2018, the report said, the average
deal size tripled to USD 157 million compared to USD 47 million in 2016.
Of the total investments that have come
in 2018, nearly 44 percent are from foreign investors primarily from the US,
Canada and Singapore. Also, over 90 percent of the foreign investment have
preferred commercial projects across Mumbai, Pune, Bengaluru and Hyderabad.
According to the study, the average deal
size of foreign investors is USD 149 million compared with domestic's USD 87
million. These domestic investors have equally preferred commercial (USD 959
million) and residential (USD 870 million) projects.
"Overall, Mumbai has been the
preferred destination attracting 53 percent (USD 2 billion) of total
investments. Most of these investments have come from foreign investors Hyderabad
(USD 793 million) and Bengaluru (USD 694 million) are preferred destinations of
domestic investors," it said.
The report further noted that there is
underutilisation of over Rs 20 billion worth of real estate investment trust
(REIT) office stocks offering a potential rental yield of up to 7.5 percent.
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