Promising Times for Indian Real Estate: FICCI Report

As per the “FICCI – Ernst & Young Indian Real Estate Report, 2007: Growth & New Destinations”, real
estate India is growing at a 30% rate, spreading evenly across India’s smaller towns and cities. The report will be released at FICCI’s International Real Estate Summit in Mumbai on the 27th of September, 2007

The report highlights the stupendous growth of 11 Indian cities where investment in the industry, including IT, infrastructure, and urban governance has improved the quality of life and prosperity of its residents.

These cities are: Surat, Chandigarh, Nagpur, Vadodara, Visakhapatnam,
Jaipur, Thiruvananthapuram, Kochi, Nashik, Indore and Ludhiana
Exponential growth has been recorded in Indian real estate, drawing
the attention of foreign investors and real estate developers.

These upcoming
cities possess cost and labour advantages over the metros, and have
seen a rapid growth in demand for commercial property.
This has sent the demand for residential property and the social and
hospitality sectors zooming, and real estate developers have shown keen
interest in making investments in these cities.

The report notes the strategic alliances being made by Indian developers,
the acquisition of land across locations and the raising of capital
to fund their development activities. The last 2 years have seen Indian
developers raise USD 4 billion for development projects, and another
4.7 billion is expected to be raised before the year-end, throwing up opportunities
for investment in different product types and regions across India.

The Ernst & Young report surveyed leading institutional investors focusing on Indian real estate. 80% of the respondents agreed that India is a top-notch investment destination, forecasting USD 5 billion to pour into Indian real estate in the next 3 years.

20% of those surveyed believed that Indian real estate could see upto
USD 20 billion of investment.
Amit Mitra, Secretary General, FICCI believes that once infrastructure
is in place following the large scale investments that are being planned
over the next 4-5 years, Indian real estate would take a further leap forward.

New growth centres are expected to emerge hosting complete social and
economic infrastructure.
The report further notes that the real estate markets of New Delhi,
Mumbai, Bangalore, Hyderabad, Kolkata and Chennai have reached a stage
of maturity and are already quite competitive.

Delhi possesses the best
infrastructure, followed by Chennai and Hyderabad, while Nagpur and
Visakhapatnam are well poised in terms of Business Environment and Infrastructure.