PDF: 2962 pages, 5.2 MB - Bay Area Council Economic Institute

Architecture/Urban Planning/Infrastructure
E: Architecture/Urban Planning/Infrastructure
Key Findings:
• India’s property boom has moderated with the downturn, but demand remains strong.
• CalPERS and private equity have invested aggressively in India’s property market.
• Development has focused on mixed-use planned housing/commercial complexes.
• Planning regulations have the effect of discouraging density and promoting sprawl.
• Site control is critical to project viability; India has no eminent domain.
• Foreign architects are limited to design, master planning, and landscape architecture.
• Bay Area firms team with Indian developers and bring branding power to projects.
Market Environment
India offers a largely untapped market for foreign architectural design and engineering firms, as
well as for planners, developers, and builders, and it is at the nexus of several favorable trends:
• sustained economic growth;
• higher living standards and expectations among returnees and the growing middle class;
• infrastructure pressure as rural populations migrate to Indian cities;
• a growing focus on land use and environmental planning relating to urbanization;
• facilities investment related to offshoring by multinationals; and
• global investment capital pursuing emerging market returns from more stable asset classes.
A 2007 paper by UC Berkeley’s Fisher Center for Real Estate and Urban Economics, “Globalization
and Real Estate: Issues, Implications, Opportunities,” notes that, since the 1990s, globalization has
transformed real estate, traditionally viewed as a sector heavily reliant on local expertise and dealing
in fixed, relatively non-tradable assets.
Investment in U.S. real estate, either directly or through trusts or various securitized financial
instruments, has long been a fairly straightforward process. It is only recently, however, that
many countries, particularly emerging markets, have relaxed licensing, taxation, and ownership
barriers that have discouraged foreign participation in property markets.
Architectural, engineering and construction service firms have followed as U.S. multinationals
have shifted manufacturing and distribution facilities, data centers, and R&D centers overseas.
That shift, in turn, has generated residential and commercial property demand, serving communities
of expatriates, returnees and an emerging professional class.
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