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REAL ESTATEFor updated information, please visit www.ibef.orgNovember 2020

Table of ContentsExecutive Summary . . . .3Advantage India . . .4Market Overview and Trends . .6Strategies Adopted . . .14Growth Drivers . . .16Opportunities . . . . 23Key Industry Organisations . . . .27Useful Information . . . .29

EXECUTIVE SUMMARY Real estate sector in India is expected to reach US 1 trillion by2030. By 2025, it will contribute 13% to the country’s GDP.India’s Real Estate Market (US billion)1500 Rapid urbanisation bodes well for the sector. The number ofIndians living in urban areas is expected to reach 525 million by2025.1000 In March 2020, share of the Indian urban population was 35%of its total population; however, share of the total GDPoriginating from urban areas was 70-75%.0 Construction is the third-largest sector in terms of FDI inflow.FDI in the sector (includes construction development andconstruction activities) stood at US 42.66 billion between April2000 and June 2020.1,00050065012020172025F2030FUrban Population in India1 92020F2025F200 Government of India’s ‘Housing for All’ initiative is expected tobring US 1.3 trillion investment in the housing sector by 2025. India's Global Real Estate Transparency Index rankingimproved by a notch to 34 in 2019 on the back of regulatoryreforms, better market data and green initiatives according toproperty consultant JLL. Home sales volume across eight major cities in India jumped by2.5x to 33,403 units from July 2020 to September 2020,compared with 9,632 units in the previous quarter, signifyinghealthy recovery post the strict lockdown imposed in the secondquarter due to the spread of COVID-19 in the country.0Cumulative FDI inflow between April 2000 - June 2020 (US billion)30.0025.6920.0010.0016.970.00Construction ActivitiesConstruction DevelopmentNotes: E - estimated; P - Projected, F- ForecastedSource: KPMG, World Bank, Census 2011, Credai-JLL report, United Nations World Urbanization Prospects 2018, CBRE, India’s Urban System: Sustainability and ImbalancedGrowth of Cities, Knight Frank3Real EstateFor updated information, please visit


ADVANTAGE INDIA Demand for residential properties has surged due to increasedurbanisation and rising household income. India is among the top10 price appreciating housing markets internationally. Growing requirement of space from sectorssuch as education, IT, healthcare, e-commerceand logistics. About 10 million people migrate to cities every year. Growing demand of energy efficient andenvironment friendly architecture. Growing economy driving demand for commercialand retail space.ADVANTAGEINDIA Driven by increasing transparency andreturns, there’s a surge in privateinvestment in the sector. The Government has allowed FDI of up to100% for townships and settlementsdevelopment projects. Real estate attracted around Rs. 43,780crore (US 6.26 billion) worth ofinvestment in 2019. Under the ‘Housing for All’ scheme, 60million houses are to be built, which include40 million in rural areas and 20 million inurban area by 2022. Real Estate (Regulation and Development)Act (RERA) 2016 will make the sector moretransparent. GST rate is brought down to 5%.Source: KPMG, Report on Real Estate Sector in India - Corporate Catalyst India Pvt Ltd, USGBC, JLL India, Cushman & Wakefield, Knight Frank Active Capital, EY5Real EstateFor updated information, please visit


SEGMENTS IN THE INDIAN REAL ESTATE SECTORResidential space Residential segment contributes 80% of the real estate sector. Housing launchesacross top eight Indian cities increased 23% y-o-y in 2019 to 223,325 units. Few players with presence across India.Commercial space Most of the activity is in the leasing segment. FDI in multi-brand retail to boost demand.Real estatesectorRetail space Retail segment in Indian attracted private equity (PE) investment of around US 1billion in 2019. Retail would add up more 39 million square feet of space by 2022. Hotel room supply in the country increased 5.4% y-o-y in FY19, totalling to 133,359rooms at the end of FY19.Hospitality space The sector is likely to attract an annual investment between US 0.5-0.6 billion during2018-2022, with total investment reaching US 2.8 billion by 2022. On July 31, 2020, India formally approved 423 SEZs, of which 248 were already inoperation. Most special economic zones (SEZs) are in the IT/ BPM sector.SEZs In March 2020, the Government approved proposals from TCS and DLF to set upSEZs for IT sector in Haryana and Uttar Pradesh.Notes: SEZ - Special Economic Zone. IT - Information Technology, BPM - Information Technology Enabled ServicesSource: KPMG Cushman and Wakefield, CRISIL, JLL India, ANAROCK Property Consultants, Colliers Research, CBRE, SEZ India7Real EstateFor updated information, please visit

INDIAN REAL ESTATE IS A LARGE, GROWINGMARKET Real estate sector in India is expected to reach US 1 trillion in market sizeby 2030, up from US 120 billion in 2017. India’s real estate market isestimated to grow at a CAGR of 19.5% during 2017- 2028. Increasing share of real estate in the GDP would be supported byincreasing industrial activity, improving income level and urbanisation. The Government launched 10 key policies for the real estate sector:Market size of real estate in India (US billion)120010001000800600 Real Estate Regulatory Act (RERA) Benami Transactions Act Boost to affordable housing construction Interest subsidy to home buyers Change in arbitration norms Service tax exemption Dividend Distribution Tax (DDT) exemption Goods and Services Tax (GST)112 Demonetisation110 PR for foreign investors650400180120200020172020E2025F2030FNHB India Housing Price '19Sept'19Notes: CAGR - Compounded Annual Growth Rate, E - Estimated, F - Forecast, Information is as per latest data available, *average of indices of all citiesSource: KPMG, Report on Real Estate Sector in India - Corporate Catalyst India Pvt Ltd, CBRE, National Housing Bank8Real EstateFor updated information, please visit

DEMAND FOR RESIDENTIAL SPACE EXPECTED TOGROW SHARPLYScenario A localised and fragmented market presentsopportunity for consolidation with only few large panIndia players like DLF. More foreign players might enter the market as FDInorms have eased. Furthermore, norms on land acquisitions is expectedto be relaxed.Cumulative Housing Demand-Supply in Top 8 Cities (‘000 units)2016-20717HIG351Key driversNotabletrends Rapid urbanisation. Growth in population. Rise in the number of nuclear families. Easy availability of finance. Repatriation of NRIs and HNIs. Rise in disposable income. Housing sales reached 2.61 lakh units in 2019across seven major cities. NCR (National Capital Region) is expected togenerate maximum demand in MIG and HIGcategory followed by Bengaluru. Developers are now focussing on affordable andmid-range categories to meet the huge 0020002500Notes: LIG - Low Income Group, MIG - Middle Income Group, HIG - High Income GroupSource : Cushman and Wakefield, Anarock Property Consultants9Real EstateFor updated information, please visit

METROS DRIVING DEMAND FOR COMMERCIALSPACE Few large developers with a pan-India presencedominate the market. Operating model has shifted from sales to lease andmaintenance.ScenarioKey drivers By 2023, commercial space is expected to reach at50 msf mainly driven by sectors - IT-BPO, pharma,engineering and manufacturing. Rapid growth in service sectors: IT/BPM, BFSI andTelecom. Rising demand from MNCs. Demand for office space in tier II cities.Demand for Commercial Space in Top 8 cities (million 92820162017City-Wise Commercial Space Demand (million square feet) 2019158134Ahemdabad16BengaluruCo-working space across top seven cities reached12 msf by end of 2019.Chennai 25HyderabadBusiness activity is shifting from CBDs to SBDs andtier I to tier II cities.3226Kolkata 35302520151050MumbaiwithPuneNotabletrendsIn 2019, the demand for office sectorcommercial leasing activity reached 69.4 msf.NCR Notes: MNC - Multinational Corporation, BFSI - Banking, Financial and Insurance Services, CBD - Central Business District, SBD - Special Business District, NCR - National Capital Region,msf- million square feetSource: Cushman and Wakefield10Real EstateFor updated information, please visit

OFFICE MARKET OVERVIEW Office market has been driven mostly by growth in BPM/IT, BFSI,consulting and manufacturing industries. Moreover, many newcompanies are planning a foray into Indian market due to hugepotential and relaxed FDI norms. Grade-A office space absorption is expected to cross 700 msf by2022, with Delhi-NCR contributing the most to this demand. During 2019, the office leasing space reached 60.6 msf across eightmajor cities, registering a growth of 27% y-o-y. In H12020, Mumbai experienced a substantial growth 36% in demandfrom consulting firms over total office space leasing. COVID-19 pandemic has resulted into work from home (WFH)element, which impacted the new space commitments in the shortterm. However, recovery of the office leasing market is expected tostart in early-2021.Net Office Space Leasing in 2019 (million square 2Notes: BPM - Information Technology Enabled Service. msf - million square feet, H1 -First half of the yearSource: Knight frank JLL India, Livemint, Colliers International, CBRE, JLL, Savills11Real EstateFor updated information, please visit

RETAIL SPACE LIKELY TO SEE STRONG GROWTHScenario Currently, retail accounts for a small portion of theIndian real estate market. Organised retailers are few and the organised retailspace is mostly developed by residential/officespace developers.Number of Malls in India300250246Key drivers Booming consumerism in India. Organised retail sector is growing 25-30% annually. Entry of MNC retailers. India’s population below 30 years of age and havingexposure to global retail is expected to drive demandfor organised retail.253232212200219203188150100Notabletrends Mumbai, NCR, Bengaluru and Kolkata witnessedhighest growth in retail real estate during 2019. Retail sector attracted US 1 billion in 2019. According to Anarock, a property consultant, India islikely to have 100 new malls by 2022. Of thisnumber, 69 malls will be built in the top sevenmetropolis and the remaining 31 malls will be in Tier2 & 3 cities.5002012201320142015201620172018Source: : Cushman and Wakefield, CBRE, JLL India, Real estate intelligence service (JLL), Anarock12Real EstateFor updated information, please visit

HOSPITALITY MARKET TO WITNESS LARGEINCREMENTAL CAPACITY Scenario NCR and Mumbai are by far the biggest hospitalitymarkets in India, followed by Bengaluru, Hyderabadand Chennai.Besides hotels, the hospitality market comprises ofservice apartments and convention centres.Branded Hotel Rooms Inventory in Major Indian Cities (‘000)12.7Bengaluru17.114.716.013.715.9New DelhiMumbai9.210.1Chennai A robust domestic tourism industry. The increasingly global nature of Indian businesses isboosting business travel.Hyderabad Tax incentives for hotels and higher Floor Space Index(FSI).GurugramKey 3.9KolkataNotabletrends Service apartments appear particularly attractivewithin the hospitality space. Government initiatives to promote tourism in tier IIand tier III cities is generating significant demand forhotels in such cities, especially budget 10.0FY1815.020.0FY23Notes: RevPar - Revenue per available roomSource: : Cushman and Wakefield, Hotelivate13Real EstateFor updated information, please visit


STRATEGIES ADOPTED Having a diverse portfolio of residential, commercial and township developments.Diversified portfolio Companies have projects in various strategic geographic locations in order to diversify risks . Focus on the growth of lease business. Housing finance companies and private equity (PE) companies have started focusing on affordable housing.Backwardintegration An architectural, structural and interior studio and a metal and glazing factory. Interiors, wood working factory, and concrete block making plant. In September 2019, DLF sold over nine acres of land in New Gurugram to American Express for about Rs. 300crore (US 42.92 million). Raymond sold its 20 acres Thane land to Xander-backed VRSA for Rs. 700 crore (US 98 million).Merger &Acquisition (M&A) In January 2020, RMZ Corp entered into a strategic and equal partnership with Mitsui Fudosan (Asia) Pte Ltd toexpand its business footprint. Iconic RK Studios property, located in suburban Chembur, was acquired by Godrej Properties. In October 2020, Australia’s REA Group Ltd. announced its agreement to acquire a controlling interest in ElaraTechnologies Pte. Ltd, the owner of, and managementin land sourcingSuperior execution Joint venture (JV) with land owners instead of amassing land banks. For example - Oberoi Realty, a Mumbai basedrealty firm, adopted this strategy while entering the NCR region. On July 23, 2020, Sunteck Realty entered a joint development agreement with landowners to construct a housingproject in the Mumbai Metropolitan Region (MMR), having a revenue potential of Rs. 5,000 crore (US 709.32million) over the next five-seven years. Outsourced support functions. Focus on delivery capability. Development of world class infrastructure. Rationalising costs.Source: Livemint, Economic Times15Real EstateFor updated information, please visit


REAL ESTATE BEING DRIVEN BY POLICIES ANDGROWING ECONOMYGrowth in tourismEpidemologicalchangesGrowth driversEasier financing17Real EstateUrbanisationGrowing economyPolicy supportFor updated information, please visit

ECONOMIC GROWTH ALONG WITH GROWINGURBANISATION IS BOOSTING REAL ESTATE DEMANDGrowth in Household Incomes in Indian Cities (2019)12%Population breakdown of India 0089388080010%4005434834614293002%200Delhi 020152018Urban2020E2025FRural The Indian economy has experienced robust growth in the past decade and is expected to be one of the fastest growing economies in thecoming years. India’s urban population is expected to reach 525 million by 2025, up from an estimated 463 million in 2020. Rising income and employment opportunities have led to more urbanisation and more affordability for real estate in cities.Notes: E - Estimate, F - ForecastSource: IMF World Economic Outlook Database, JLL, *United Nations World Urbanization Prospects 201818Real EstateFor updated information, please visit

RISING TOURIST NUMBERS BOOSTING THEHOSPITALITY SECTORForeign Tourists Arrivals in India (million)2020 (TillMarch)20196.1530.027.0120182.52020 (TillMarch)20160.027.710.920192.0CAGR 022.910. 7.1%10.0201612.0India’s Foreign Exchange Earnings From Tourism (US billion) During 2019, foreign tourist arrivals (FTAs) in India stood at 10.9 million, achieving a growth rate of 3.20% y-o-y. India’s tourism and hospitality industry is anticipated to touch US 418.9 billion by 2022. During 2019, India earned US 30.0 billion in foreign exchange from tourism, recording a y-o-y growth of 4.80%. Foreign exchange earnings(FEEs) from tourism in India grew at a CAGR of 8.96% during 2007-19. The growing inflow from tourists is expected to provide a fillip to the hospitality sector. Medical tourism sector in India is gaining momentum with a target of attracting 8 million medical tourists into the country by 2020. Hilton plans to add 18 hotels pan India by 2021, along with 15 operational hotels under its brands—Hampton, Hilton Garden Inn, Conrad, HiltonHotels & Resorts and DoubleTree by Hilton. On October 22, 2020, Hilton launched its first DoubleTree by Hilton brand in Jaipur, Rajasthan. In October 2020, Sarovar Hotels and Resorts announced its plan to add 15 properties, mainly in Tier-II and Tier-III cities, in India by end-2021.Notes: CAGR is up to 2019, CY - Calendar YearSource: Ministry of Tourism, News Article19Real EstateFor updated information, please visit

GOVERNMENT POLICIES ARE HELPING THE REALESTATE SECTOR PROSPER (1/2)Ease in housingfinance In order to boost affordable real estate, housing loans up to Rs. 3.5 million (US 54,306) in metro cities wereincluded in priority sector lending by the RBI in June 2019. Loans under priority sector lending are relativelycheaper. Housing loans account for more than half of retail loans.Housing foreconomicallyweaker section On July 09, 2020, Union Cabinet approved the development of Affordable Rental Housing Complexes (AHRCs) forurban migrants and poor as a sub-scheme under Pradhan Mantri Awas Yojana - Urban (PMAY-U). In October 2020, the Ministry of Housing and Urban Affairs (MoHUA) launched an affordable rental housingcomplex portal. The Government has allowed 100% FDI for townships and settlements development projects.FDI Provision for reduction in minimum capitalisation for FDI investment from US 10 million to US 5 million to boosturbanisation. In January 2018, the Government allowed 100% FDI in single-brand retail trading and construction developmentwithout Government approvals.REITs Real Estate Investment Trusts (REITs) in non-residential segment will open channels for both commercial andinfrastructure sector. In March 2019, Embassy Office Parks, India’s first REIT, went public. First REIT raised Rs. 4,750 crore (US 679.64 million) and was launched in early 2019 by global investment firm,Blackstone, and realty firm, Embassy group. In December 2014, the Government passed an ordinance amending the Land Acquisition Bill.Land Acquisition BillJ&K's New LandLaw This ordinance is intended to speed up the process for industrial corridors, social infra, rural infra, housing for thepoor and defence capabilities. On October 27, 2020, the government announced the application of Real Estate (Regulation & Development) Act,2016 in the union territory of Jammu & Kashmir. This has paved the way for any Indian citizen to buy nonagricultural land and property, as opposed to the eligibility of only local residents earlier.Source: Government of India, News Article20Real EstateFor updated information, please visit

GOVERNMENT POLICIES ARE HELPING THE REALESTATE SECTOR PROSPER (2/2)Govt-backed StressFundStamp Duty The Special Window for Completion of Construction of Affordable and Mid-Income Housing (SWAMIH I) supportedhousing projects have started witnessing fresh sales and collection of dues from existing homebuyers, indicating achange in confidence-levels of prospective and existing homeowners towards stressed projects. In November 2020, SBICAP Ventures Ltd. managed fund cleared investments worth Rs. 13,200 crore (US 1.78billion) for 136 projects and has started deploying funds across 36 projects. The Ministry of Housing and Urban Affairs has recommended all the states to consider reducing stamp duty ofproperty transactions in a bid to push real estate activity, generate more revenue and aid economic growth. In addition, the Maharashtra government reduced stamp duty rates from 5% to 2-3%, effective Septe

Real estate sector in India is expected to reach US 1 trillion in market size by 2030, up from US 120 billion in 2017. India’s real estate market is estimated to grow at a CAGR of 19.5% during 2017- 2028. Increasing share of real estate in the GDP would be supported by increasing industrial activity, improving income level and urbanisation.

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