Demand for real estate in India looks set to soar following the government’s initiatives such as ‘Smart Cities’, ‘Housing For All By 2022’ and infrastructural developments.
There has never been a more opportune time for foreign investors to invest in Indian real estate. Important Government reforms to the real estate, infrastructure and construction sectors have boosted foreign investor confidence, resulting in a rise in FDI and significant increases in the average size of investment. The introduction of REITs has enhanced investor confidence and with the passing of a REIT Bill looking to come into fruition, the Indian realty industry is set to experience continued levels of growth in 2016 and beyond.
REFORMS
Government initiatives such as ‘Smart Cities’ and ‘Housing For All By 2022’ have not only assisted with the growth of the economy, they have also helped to gain an improved image of India as an investment hub and land of opportunity. In the current investment cycle alone, at least USD2.2 billion has been accumulated in FDI, serving further to prove that foreign investors’ eyes are firmly on India as an attractive investment hotspot.
Since 2014, we are not only seeing an increase in the number of foreign investors, we are also seeing an increase in the average investment size which has risen from USD134 million to USD184 million. This figure can only increase as more reforms are made to ease the way for doing business in India.
SMART CITIES
The luxury real estate market is seeing a positive trajectory, as the demand for fully-integrated township communities increases. With the economy consistently seeing a healthy, sustained growth, and recently predicted by the UN to be the fastest growing large economy in 2016, India is one of the fastest growing countries for high net worth individuals. Employment opportunities are in abundance and top-level incomes are at a record high, and HNWIs are increasingly investing in luxury branded residences as they look for homes that match their affluent lifestyles.
[ihc-hide-content ihc_mb_type=”show” ihc_mb_who=”1,2,3,4,5″ ihc_mb_template=”1″ ]
Greater demand for self-sufficient smart cities with a combination of residential, commercial and cultural commodities gives way to high-end developments such as ours at DLF5. As well as offering luxury residential, commercial and retail facilities, we have lifestyle and infrastructure amenities available in endless supply, housing our own fire station and expertly designed professional golf course.
Expectations of prospective realty investors are at an all-time high under Prime Minister Narendra Modi’s Smart City campaign, thus it is vital to employ the latest technologies available to create high quality infrastructure to meet the growing demands. Roads in India are notorious and are in severe need of reconstruction if the country is to provide sufficient infrastructure to aid the growth of international trade and investment.
GLOBAL CORPORATE DEMAND
India’s burgeoning infrastructural development has attracted global companies such as Facebook, Apple and Coca Cola who have chosen the country’s urban cities as their headquarters. In 2015, office rental growth at DLF reached record figures, growing by 20% in DLF CyberCity. The increasing demand for high quality office space in prime locations has primarily come from the IT and E-commerce sectors, a trend that we will see continue in 2016. CyberCity achieved 98% occupancy by the end of last year, along with our other developments in Chennai and Hyderabad which also displayed an upward rental trade of 7-8% growth.
The Indian real estate sector saw a slump for a few years, but the future is looking bright and is expected to make a turnaround this year. In Knight Frank’s report on Residential Investment Advisory 2016, Delhi- NCR in particular was identified as one of the top cities to give good returns in the next five years, predicting that Golf Course Extension Road and New Gurgaon will emerge as potential destinations for residential investment. With the implementation of technological advances, increasing demand of high quality residential housing and shifts in global opinion towards doing business with India under Government initiatives, 2016 looks to be a year of solid growth in investment for the Indian real estate industry.[/ihc-hide-content]