The Indian real estate sector, which contributed about 6-7% to the country’s gross domestic product (GDP) in 2017, is expected to double its contribution by 2025, KPMG said in a report.
With 2018 proving to be a turning point, the real estate sector is estimated to grow to $650 billion by 2025 and surpass $850 billion by 2028, KPMG said in the report ‘Indian real estate and construction: Consolidating for growth,’ which was unveiled at the Real Estate and Infrastructure Investor’s Summit 2018 in Mumbai.
The growth will be driven by emerging asset classes such as affordable housing and co-working spaces, it said. Anticipating business opportunities, institutional investors have invested $4 billion so far in 2018 and the average deal size crossed $150 million mark, the highest in the last five years, the report said.
“Institutional financing is becoming a prominent financing medium, particularly focussing on the commercial sector which attracts over 60% of investments,” it said. Neeraj Bansal, Partner ASEAN corridor and Building, Construction and Real Estate, KPMG in India, said, “The real estate sector in India has now entered a revitalisation phase and teething problems posed by various regulatory reforms have started settling in.”
Customer centricity
“Reforms like RERA, GST and REITs are bringing in structural changes promoting transparency, governance, institutional funding and the industry is moving towards greater customer centricity and technology adoption across the value chain,” Mr. Bansal said.
He said the growth of the commercial segment has been fuelled by an upward momentum in assets classes such as co-working spaces and warehousing.
“Changes in GST, along with rapid and consistent implementation of RERA across States, will enhance consumer confidence and help pick up the residential segment,” he added.
Commenting on the report, president-elect of NAREDCO West, Rajan Bandelkar said, “Foreseeing the trend, the future looks promising.”
“And with technology playing the role of a key enabler, our focus will be on improvising the condition of solid waste management, skill development, infrastructural development and other industry progressive led policy changes,” he said.
Published - September 29, 2018 08:58 pm IST
