Investors to pump in $7 billion investments into real estate in 2017
It anticipates that breakthrough disruptions – regulation, finance, customers and technology are likely to have positive insinuations on the sector and will facilitate a new ecosystem which will be more conducive
A favourable regulatory environment coupled with attractive asset valuations has enhanced investor confidence by changing the perception of Indian realty in the global arena. Interest from offshore equity investors, large Indian corporates and high net worth individuals (HNIs) are likely to bring in investments worth USD 7 billion into the sector this year, says a report.
While office and residential are expected to remain traditional drivers for the industry; alternate sectors, such as retail and warehousing will also are also likely to be in the forefront, says a report by CBRE titled Indian Real Estate in 2017 and Beyond released by CREDAI at its 17th Annual International Convention, NATCON 2017 in London.
The report encapsulates the major policy related disruptions by Government of India which are challenging the traditional operating environment by setting a new foundation for change. According to the report, regulatory measures such as RERA, GST and REITs are aimed at improving transparency in the sector, increasing the share of organised segment and enhancing the overall investor sentiment. This will help in catalysing ease of doing business in the country while supporting corporate entities entering or expanding their footprint in India.
It anticipates that breakthrough disruptions – regulation, finance, customers and technology are likely to have positive insinuations on the sector and will facilitate a new ecosystem which will be more conducive.
With RERA, GST and I-REITs becoming a reality in 2017, the Government has taken a lead in challenging the operating fabric with regulatory disruptors and making affordable housing the growth catalyst in the residential segment, it says.
The report also looks at the changing customer preferences in office, retail, residential and warehousing space. For instance, the dynamics in office spaces are being disrupted with the entry of Millennials – over, two-thirds of the Indian Millennials feel the quality of office design impacts their productivity to a large extent.
In the warehousing segment – entry of international players is ensuring that better and larger warehouses emerge in key markets; in the residential segment - customers will have a say in operations with effective grievance redressal. Customer experience has also become at the heart of retail’s strategy which is fuelling future trends like customisation and hyper customisation.
As per the survey, more than 40 percent of retailers in cities such as Noida, Gurgaon, Delhi, Mumbai, Kolkata etc. preferred locating in the malls, as they serve as experience destinations, as per the report.
“The government’s aggressive push to formalize, regulate and encourage investment to the sector with a slew of measures like RERA, REITs is consolidating India’s position on the global map. We believe that these disruptions and encouraging trends will definitely manifest a more exciting future which will be full of possibilities and opportunities for Indian real-estate,” says Jaxay Shah, president, CREDAI National.“In this burgeoning Indian economy, the one sector that has emerged from the restraints of the past is real estate. The sector in India is one of the key contributors and mainstays for India’s development as a nation. Real estate in India continues to be in a dynamic phase and the pace at which the four cornerstones – regulation, finance, customers and technology are evolving, a more than incremental transformation in the sector is expected in the coming years. In this report we have dwelled on how a strong foundation for this change has already been laid with a conducive operating environment, the future growth of the sector will be determined by many other factors,” says Anshuman Magazine, chairman, India & South East Asia, CBRE.