Page 26 - 10 Booming Real Estate & Logistics Companies in APAC 2022

FOCUS POINT
Real estate sector is one of the
most globally recognized sectors.
It comprises of four sub sectors
housing, retail, hospitality, and
commercial. The growth of this sector
is well complemented by the growth
in the corporate environment and the
demand for office space as well as
urban and semi-urban accommoda-
tions. The construction industry ranks
third among the 14 major sectors in
terms of direct, indirect and induced
effects in all sectors of the economy.
In India, the real estate sector is the
second-highest employment gener-
ator, after the agriculture sector.
It is also expected that this sector
will incur more non-resident Indian
(NRI) investment, both in the short
term and the long term. Bengaluru is
expected to be the most favoured
property investment destination for
NRIs, followed by Ahmedabad, Pune,
Chennai, Goa, Delhi and Dehradun.
MARKET SIZE
By 2040, real estate market will grow
to Rs. 65,000 crore (US$ 9.30 billion)
from Rs. 12,000 crore (US$ 1.72 billion)
in 2019. Real estate sector in India is
expected to reach US$ 1 trillion in
market size by 2030, up from US$
200 billion in 2021 and contribute 13%
to the country’s GDP by 2025. Retail,
hospitality, and commercial real
estate are also growing significantly,
providing the much-needed infra-
structure for India’s growing needs.
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As per ICRA estimates, Indian firms
are expected to raise >Rs. 3.5 trillion
(US$ 48 billion) through infrastructure
and real estate investment trusts
in 2022, as compared with raised
funds worth US$ 29 billion to date.
The office market in the top eight
cities recorded transactions of 22.2
msf from July 2020 to December
2020, whereas new completions
were recorded at 17.2 msf in the same
period. In terms of share of sectoral
occupiers, Information Technology
(IT/ITeS) sector dominated with a
41% share in the second half of 2020,
followed by BSFI and Manufacturing
sectors with 16% each, while Other
Services and Co-working sectors
recorded 17% and 10%, respectively.
Around 40 million square feet
were delivered in India in 2021. It is
expected that the country will have
a 40% market share in the next 2-3
years. India is expected to deliver
46 million square feet in 2022.
According to the Economic Times
Housing Finance Summit, about 3
houses are built per 1,000 people
per year compared with the required
construction rate of five houses
per 1,000 population. The current
shortage of housing in urban areas
is estimated to be ~10 million units.
An additional 25 million units of
affordable housing are required
by 2030 to meet the growth in
the country’s urban population.
INVESTMENTS/DEVELOPMENTS
Indian real estate sector has witnessed
high growth in the recent times with
rise in demand for office as well as
residential spaces. According to
Colliers India, a property consultant,
institutional investments in the Indian
real estate sector are expected
to increase by 4% to reach Rs.
36,500 crore (US$ 5 billion) in 2021,
driven by rising interest of investors
towards capturing attractive valua-
tions amid the pandemic. According
to a recent report by Colliers India,
private equity investments in Indian
real estate reached US$ 2.9 billion in
the first half of 2021, which was a >2x
increase from the first half in 2020.
According to the data released by
Department for Promotion of Industry
and Internal Trade Policy (DPIIT),
construction is the third-largest
sector in terms of FDI inflow. Construc-
tion is the third-largest sector in
terms of FDI inflow. FDI in the sector
(including construction development
& activities) stood at US$ 52.48 billion
from April 2000 to December 2021.
Some of the major investments and
developments in this sector are as
follows:
• Between January 2021 and
September 2021, private equity
investment inflows into the real
estate sector in India stood at US$
3.3 billion.
• Home sales volume across seven
major cities in India surged 113% YoY
to reach ~62,800 units in the third
quarter 2021, from 29,520 units in
the same period last year, signifying
healthy recovery post the strict lock-
down imposed in the second quarter
due to the spread of COVID-19 in the
country.
• In November 2021, Ascendas India
bought Aurum Ventures’ 16-storey
commercial tower in Navi Mumbai for
Rs. 353 crore (US$ 47 million), making
it the largest deal of a standalone
commercial tower by a global insti-
tutional investor during the past few
years.
• REA India-owned online real
estate company Housing.com tied up
with online legal assistance start-ups
LegalKart, Lawrato, Vidhikarya and
Vakil in 2021 to offer legal advice and
assistance to homebuyers.
• Top three cities—Mumbai (~39%),
NCR-Delhi (~19%) and Bengaluru
(~19%)—attracted ~77% of the total
investments recorded in the third
quarter of 2021.
• India’s flexible space stock is likely
to expand by 10-15% YoY, from the
current 36 million sq. ft., in the next
three years, according to a report by
CBRE.
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