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Source: Central Statistical Organisation.
REAL ESTATE MARKET
The real estate story in India is growing bigger by the day. Industry experts believe that Indian
real estate has huge demand potential in almost every sector -- especially commercial,
residential and retail. Real estate sector covers residential housing, commercial offices, and
trading spaces such as theatres, hotels and restaurants, retail outlets ans industrial buildings
such as factories and government buildings.
Growth in commercial office space requirement is led by the burgeoning outsourcing and
information technology (IT) industry. By 2010, the IT sector alone is expected to require 1500
million sq.ft. of space across major cities. It is estimated that in the residential sector there is
a housing shortage of 19.4 million units out of which 6.7 million are in urban India. The
increase in purchasing power and exposure to organised retail formats has redefined the
consumption pattern. As a result, retail projects have been mushrooming across even B-grade
cities. The retail market is expected to grow at around 35 per cent. Industry observers feel
that this growth is facilitated by favourable demographics, increasing purchasing power,
existence of customer-friendly banks and housing finance companies, professionalism in real
estate and reforms initiated by the Government to attract global investors.
Indian Retail Sector
The Indian retail market -- one of India's fastest growing industries -- is expected to grow from
US$ 350 billion to US$ 427 billion by 2010. According to Euromonitor International, the Indian
Retail market will grow in value terms by a total of 39.6 per cent between 2006 and 2011,
averaging growth of almost 7 per cent a year.
Modern retail accounts for about 4 per cent of the total retail market in India. This share is
expected to increase to about 15 -20 per cent with the entry of a number of corporate into the
segment. Modern retail formats have grown by 25-30 per cent in India in the last year and
could be worth US$ 175-200 billion by 2016.
Retail space
Retailers in India are the most aggressive in Asia in expanding their businesses, thus creating a
huge demand for real estate. Their preferred means of expansion is to increase the number of
outlets in a city, and also expand to other regions, revealed the Jones Lang LaSalle third annual
Retailer Sentiment Survey-Asia.
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