Realty market set to bounce back
The liberalised economy and a robust demand for real estate across sectors are key factors that will make the market more reliable for investments in future, says Prabhakar Sinha.The slowdown in the real estate sector will not last long. Cushman & Wakefield's Real Estate Investment report for 2008,The Metamorphosis, points out that in the long-term perspective, strong demand for real estate will remain intact in India.
The report says that the pan-India demand for real estate across office, retail, residential and hospitality sectors, is expected to cross 1,000 million sqft by 2012. A major portion of the demand, at around 876 million sqft, however, will come from the seven major cities (as shown in the chart). A dynamic workforce, liberalised economy, and a robust demand for real estate across sectors, are some key factors that will make the market in the coming times more reliable for investments, especially in the real estate sector, the report says.
The residential segment will continue to drive real estate demand with 687 million sqft, contributing 63 percent throughout the term under consideration. Despite the expected slowdown in the office market, the report says the demand for commercial office space is projected to be 243 million sqft, which is around 22 percent of the total demand projections for the next five years. The retail and hospitality segments are expected to constitute 95 million sqft, which will be nine percent of the total demand and 73 million sqft, or six percent of the projected demand, respectively. In the seven cities, the total demand for office space is likely to be 202 million sqft. During the boom period of 2007, the demand for office space in all these seven cities was around 50 million sqft. Therefore, the expected demand of 202 million sqft, despite the global slowdown, will augur well for the sector.
The report says that the pan-India demand for real estate across office, retail, residential and hospitality sectors, is expected to cross 1,000 million sqft by 2012. A major portion of the demand, at around 876 million sqft, however, will come from the seven major cities (as shown in the chart). A dynamic workforce, liberalised economy, and a robust demand for real estate across sectors, are some key factors that will make the market in the coming times more reliable for investments, especially in the real estate sector, the report says.
The residential segment will continue to drive real estate demand with 687 million sqft, contributing 63 percent throughout the term under consideration. Despite the expected slowdown in the office market, the report says the demand for commercial office space is projected to be 243 million sqft, which is around 22 percent of the total demand projections for the next five years. The retail and hospitality segments are expected to constitute 95 million sqft, which will be nine percent of the total demand and 73 million sqft, or six percent of the projected demand, respectively. In the seven cities, the total demand for office space is likely to be 202 million sqft. During the boom period of 2007, the demand for office space in all these seven cities was around 50 million sqft. Therefore, the expected demand of 202 million sqft, despite the global slowdown, will augur well for the sector.