Beruflich Dokumente
Kultur Dokumente
Executive Summary
3
Advantage India
4
Market Overview and Trends
6
Porters Five Forces Analysis
14
Strategies Adopted
16
Growth Drivers
18
Opportunities
29
Success Stories
DECEMBER 2016
37 For updated information, please visit
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REAL ESTATE
EXECUTIVE SUMMARY
CAGR: 0.52%
25
Fourth largest sector in terms FDI in the sector is estimated
of FDI inflows 24.24 to grow to USD25 billion by
FY22
FY16 FY22E
USD billion
CAGR: 2.04%
600 The number of Indians living in
Rapid urbanisation bodes well 434 urban areas will increase
for the sector from 434 million in 2015 to
about
600 million by 2031
Source: Ministry of Tourism, KPMG, World Bank, Census 2011, TechSci Research
Note: E- Estimated
DECEMBER 2016 For updated information, please visit 3
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REAL ESTATE
ADVANTAGE INDIA
REAL ESTATE
ADVANTAGE INDIA
2015
RGorobwusint
Attractive opportunities 2028E
Growing requirements of space from
Market Market
dgedmeamnadnd sectors such as education and healthcare
size: size:
USD126 Demand for residential properties has Growth in tourism providing opportunities
USD853
billion surged due to increased urbanisation billion
and rising household income in the hospitality sector
About 10 million people migrate to cities
every year
35 per cent of the population is in young
space
age bracket (15-35 years)
Growing economy driving demand for Advantage
commercial and retail India Policy support
Increasing investments
During April 2000 and September 2016,
The government has allowed FDI of up to 100
FDI inflows in construction development per cent for townships and settlements
in India stood at USD24.24 billion and development projects
accounted for 8.4 per cent of total FDI
inflows into the country
Under the Housing For All scheme, 6 crore
houses are to be built in which 4 crore in rural
India's commercial capital, Mumbai,
areas and 2 crore in urban area by 2022
attracted more than USD2 billion (Rs
13,400 crore) of private investments in Real Estate Bill was passed in March 2016 to
2016, for enhancing growth in the
establish a real estate regulatory authority for
construction sector.
regulating & promoting the sector
Source: KPMG, Report on Real Estate Sector in India Corporate Catalyst India Pvt Ltd,
Department of Industrial Policy and Promotion, TechSci Research, News articles
Notes: FDI - Foreign Direct Investment, NHB: National Housing Bank, 2028E - Estimates for
2028;
DECEMBER 2016 Figures mentioned are as per 5
latest data available
REAL ESTATE
Source: KPMG Cushman & Wakefield, Knight Frank, CRISIL, www.sezindia.com, TechSci Research
Notes: SEZ - Special Economic Zone. IT - Information Technology, ITeS - Information Technology Enabled Services
Real estate contribution to Indias GDP is estimated to Market size of real estate in India (USD billion)
increase to about 13 per cent by 2028
FY20E
FY28E
FY08
FY09
FY10
FY13
FY15
FY11
investment destinations in Asia
The urban housing shortage is estimated at 18.78 million in Urban-rural housing shortage (million)
2015.
21.7
20.5
19.3
18.78
Significant increase in real estate activity in cities like
18.4
15.1
Indore, Raipur, Ahmedabad, Jaipur and other two-tier cities;
30.1
26.7
19.7
14.8
this has opened new avenues of growth for the sector
26
34
Relaxation in the FDI norms for real estate sector has been 2001 2005 2008 2010 2014 2015
done to boost the real estate sector
Urban Rural
41%
Rapid urbanisation LIG 22%
Growth in population
Key drivers Rise in the number of nuclear families 40%
Easy availability of finance Demand
Repatriation of NRIs and HNIs
Key Rise in disposable income Supply
drivers
Demand analysis of top 8 cities (000 units) 2013-
Demand to grow at a CAGR of 2.0 per cent over 17 (MIG+HIG)
the period 2013-17 across top 8 cities in India 775
NCR is expected to generate maximum demand
in MIG and HIG category followed by Bengaluru
315 400
Notable Developers now focussing on affordable and 270 245 165 230
trends mid-range categories to meet the huge demand 105
Notable During the period January-June 2016, residential
Trends sector commanded the largest share of PE
Kolkata
Chennai
Bengaluru
Pune
NCR
Hyderabad
Ahmedabad
Mumbai
investments with a total value of US$ 1.29 billion
(44 per cent)
During the third quarter of 2016, cumulative
investment in residential assets increased at 9
Source: Cushman & Wakefield, TechSci Research
per cent on q-o-q basis
Notes: LIG Low Income Group, MIG - Middle Income Group, HIG - High Income Group
DECEMBER 2016 For updated information, please visit 10
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REAL ESTATE
METROS DRIVING DEMAND FOR COMMERCIAL SPACE
16 15
Mumbai, NCR and Bengaluru account for 60 per 13
8 4
cent of total office space demand in India by 2017
Bengaluru is likely to experience highest demand
Kolkata
Pune
Bengaluru
NCR
Chennai
Hyderabad
Ahmedabad
Mumbai
over 2013-17 followed by Mumbai and NCR
NotaNboleta
ble Business activity shifting from CBDs to SBDs,
Tier 1 to Tier 2 cities
Trendtsrends As on September 2016, the total prime office
space absorption across seven leading cities in
the country was about 28 million sq. ft. Source: Cushman & Wakefield, TechSci Research
Notes: MNC - Multinational Corporation, BFSI - Banking, Financial and Insurance
Services, CBD - Central Business District, SBD - Special Business District, NCR - National
Capital Region
DECEMBER 2016 For updated information, please visit 11
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REAL ESTATE
RETAIL SPACE LIKELY TO SEE STRONG GROWTH
NCR and Mumbai are by far the biggest hospitality 114 118 120
markets in India, followed by Bengaluru, Hyderabad 100
SScceen and Chennai 82
Besides hotels, the hospitality market comprises
naarriio serviced apartments and convention centres
o
Chennai
Kolkata
Ahmedabad
Bengaluru
Hyderabad
Pune
Mumbai
NCR
Serviced apartments appear particularly 0
attractive within the hospitality space
NotabNleotTarb Government initiatives to promote
elneds tourism in Tier
trends 2 and Tier 3 cities is generating significant
demand for hotels in such cities, especially for Stock (RHS) AOR (%) (LHS)
budget hotels
Source: Cushman & Wakefield, TechSci Research
Note: FSI - Floor Space Index
STRATEGIES ADOPTED
REAL ESTATE
STRATEGIES ADOPTED
Joint Venture with land owners instead of amassing land banks. For e.g.: Oberoi Realty,
Risk management in Mumbai based realty firm adopted this strategy while entering the NCR region
land sourcing Revenue, area and profit sharing agreement with the land owner
An architectural, structural and interior studio and a metal and glazing factory
Backward integration Interiors and wood working factory and a concrete block making plant
To maintain quality all across projects
In 2015, real estate advisory Square Yards signed an agreement to merge with online
property search portal Realizing.in
Merger and Acquisitions Mergers and acquisition activities would help the real estate players to serve the market in
a better manner
GROWTH DRIVERS
REAL ESTATE
REAL ESTATE BEING DRIVEN BY POLICIES AND GROWING ECONOMY
Epidemological
Growth drivers Growing economy
changes
The Indian economy experienced robust growth in the past Real GDP growth rates of major economies
decade and is expected to be one of the fastest growing
economies in the coming years
Indias real GDP grew to 6.8 per cent in 2014 and would
rise to 6.6 per cent in 2015 compared with emerging
economies average of 4.60 per cent and 4.2 per cent,
respectively. Indias real GDP is estimated to be 6.8 per
cent in 2019
2010 2011 2012 2013 2014 2015E 2016F 2017F 2018F 2019F
Indias urban population as a percentage of total population Population breakdown of India (million)
is around 32.7 per cent in 2015 and is expected to rise to 40
per cent by 2030
1470
1311
1270
1210
Better wages and better standard of living is expected to
1028
result in an increase in urban population in India to above
846
600 million by 2031 from 429 million in 2015
590
429
Government initiatives such as various urban development
406
377
286
policies and programmes (e.g., JNNURM) are expected to
217
contribute to enhanced urbanisation.
Urbanisation and growing household incomes are driving 1991 2001 2011 2014 2015 2030F
demand for residential real estate and growth in the retail
Total Population Urban Population
sector
In 2015, 8 million foreign tourists arrived in India, whereas, Foreign tourists arriving in India (million)
from January 2016 to May 2016, foreign tourists in India
reached to 3.6 million
15.3
The number of foreign tourists arriving in India is expected
to increase at a CAGR of 7.1 per cent during 200725E
CAGR: 7.1%
Indias tourism & hospitality industry is anticipated to touch
USD418.9 billion by 2022.
8.0
As per the Union Budget 2016-17: 7.0 7.4
6.3 6.6
5.8
Government allocated USD14.5 billion for 5.1 5.3 5.2
4.4
investment in road sector, focusing on PMGSY 3.9 3.6
during 2016 17
India earned foreign exchange of about USD21.1 billion Indias foreign exchange earnings from tourism
from tourism sector in 2015 (USD billion)
In June 2015, online real estate platform Housing.com had Indiabulls Properties Indiabulls Property 223.1 2012
acquired 100 per cent equity of a risk assessment firm Realty Pvt Ltd Invest Trust
Business Intelligence for USD1.7 million. This acquisition Embassy Property Blackstone 200 2012
would empower Housing.com customers with risk
assessment and credible real estate market intelligence in Farallon Capital Indiabulls Real 187 2013
taking informed decision making while investing in new Estate Ltd
projects Candor Investments Brookfield Asset 337.4 2014
Inc Management Inc
In April 2016, Blackstone Group announced its plans to GIC and Ascendas Ascendas India 600 2014
acquire a majority stake in Mphasis Limited. The deal would Growth Program
be the largest acquisition by Blackstone in the country. Realty Business Housing.com 1.7 2015
Intelligence
As a sign of its increasing interest in Indian real estate
market, In December 2016, Canadian Pension Plan Quickr India Pvt Ltd Indian Realty - 2015
Exchange
Investment Board (CPPIB) has agreed to buy up to 49%
stake in Phoenix MarketCity, Bangalorea retail asset Grabhouse Quickr India Pvt Ltd 10 2016
owned by Mumbai-based developer, The Phonenix Mills Ltd.,
over a period of three years.
Source: Corporate Catalyst India , Business Standard, The Economic
Times
DECEMBER 2016 For updated information, please visit 25
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REAL ESTATE
PE INVESTMENTS ON THE RISE
In 2015, Mumbai reported maximum PE investments in real state
sector, followed by NCR, Chennai and Bangalore Top PE deals in Indian real estate sector till July 2016
Investor Investee Investment
In March 2016, Piramal Enterprises Ltd. jointly with APG Asset (USD million)
Management company invested USD132 million in Essel
KKR & Co. L.P. Sunteck Realty Ltd 22.4
Infrastructure Ltd.
Apollo Global Logix Group 59.5
In July 2016, PE firm Apollo Global Management invested in Management
Logix Group to fast track existing commercial and residential Piramal Fund Lodha Group 63.2
projects of the company Management Pvt. Ltd
KKR & Co. L.P. Mantri Developers Pvt 21.5
For the period January-September 2016, total PE investments in Ltd
the real estate sector were recorded at USD 4.24 billion, showing Goldman Sachs Piramal Enterprises 150
a 22 per cent increase compared to the same period last year Ltd
100 per cent FDI permitted in real estate projects within Share of SEZ exports in total exports of India
Special Economic Zone (SEZ)
total exports
Others
A deduction for additional interest of USD746.8 per annum for loans upto USD0.05 million
Ease in housing was sanctioned during 2016-17, in case of first time home buyers, where the cost of house
finances is less than USD0.07 million
Increase in exemption limit from USD3317 to USD4147 will help in household savings
During June 2016 to March 2019, 100 per cent deduction for profits would be approved for
Housing for
undertaking housing project of flats upto 30 sq. metres in four metro cities and 60 sq.
economically weaker
metres in other cities
sections As per section 80GG, increase the limit of deduction of rent paid from USD358 to USD896
per annum, was allowed for the people living on rent
The government has allowed 100 per cent FDI for townships and settlements
development projects
FDI Provision for reduction in minimum capitalisation for FDI investment from USD10 million
to
USD5 million which would help in boosting urbanisation
SEBI released draft guidelines for investments by Real Estate Investment Trusts (REITs)
Widening the scope
in non-residential segment and Infrastructure Investment Trusts. REIT will open channels
of real estate for both commercial and infrastructure sector
market
In December 2014, the government passed an ordinance amending the Land Acquisition
Bill
Land Acquisition Bill This ordinance would help speeding up the process for industrial corridors, social
infra,
rural infra, housing for the poor and defence capabilities
Source: Union Budget 2016 17, TechSci Research
OPPORTUNITIES
REAL ESTATE
EDUCATION SECTOR PRESENTS OPPORTUNITIES FOR REAL ESTATE FIRMS
NCR is expected to have the highest incremental demand Incremental demand across seven major
from the education sector cities (million sq ft)
Kolkata Chennai
Emergence of nuclear families and growing urbanisation have given rise to several
townships that are developed to take care of the elderly
Senior Citizen Housing A number of senior citizen housing projects have been planned; the segment is expected
to grow significantly in future
Growth in the number of tourists has resulted in demand for service apartments.
Service Apartments In 2015, number of foreign tourist arrivals in India was recorded at 8 million
This demand is likely to be on uptrend and presents opportunities for the unorganised
sector
The number of foreign tourists arriving in India in 20161 has CAGR: 6.7%
15.3
reached 3.6 million
3.6
.
1
2012 2013 2014 2015 2016 2025E
Hyderabad Room demand is expected to be driven by commercial and office space projects in the city
Projects like Light Rail Transport System, Mono Rail, Eco-Park, Airport expansion etc. are
Kolkata
likely to boost travel which would result in increase in demand for hotel industry
Improved infrastructure, new airport terminal and upcoming airport in Navi Mumbai
Mumbai
expected to provide growth to hotel industry
Higher Floor Space index, inclusion of hotel projects in infra lending lists provide a positive
NCR
outlook to hotel market in NCR
IT parks are attracting global players and increasing traffic. New business units are likely
Pune
to increase business conferences, events which in turn would boost hotel demand
In 2015, the top 8 cities recorded a net office absorption of New supply as percentage of inventory (2013-2015)
32.45 MSF, displaying strong growth potential
Hyderabad 14.5%
Demand for prime office space was recorded at 11 million
Kolkata 2.3%
sq. ft. for the period July September 2016, showing a
growth of 14 per cent on a year-on-year basis Mumbai 13.1%
Pune 7.2%
1
Source: Cushman & Wakefield
Notes: MSF - Million Square Feet,
ITeS - Information Technology Enabled Service,
1 - Data for 2015
Rental rates likely to see a gradual upward trend in Percentage vacancy levels
Bengaluru
31.4
30.9
In Hyderabad
29
25.8
25.6
23.2
Rent will remain stable, oversupply will impact non-core
21.4
locations in 2014-15 in Delhi
18.7
18.2
17.4
16.2
15.1
14.5
14.2
In 2015, with a share of more than 83 per cent, majority of
13.3
12.6
11.3
transactions in Mumbai was driven by commercial office
12
sector
Delhi
Bengaluru
Pune
Chennai
Hyderabad
Mumbai
As of November 2016, Singapores DBS Bank announced
its plans to secure 100 thousand sq. ft. of prime office at
Mumbais Nariman Point, on lease basis. With a total tenure
of nine years, the deal will be the largest transaction in the
history of the area 2013 2014 2015
Commercial office sector garnered the second largest share Sector-wise share of investments (20151)
of investments which stood at USD0.3 billion; hospitality
sector has the highest share with investments around
USD0.34 billion during January-September 2015
Primal Fund Management has expanded its portfolio to offer 20% Offices
Flexi - Lease Rental Discounting (LRD). By 2018, the fund
aims at securing lease rental discount deals worth USD Residential
1.49 billion
Retail
31.90%
SUCCESS STORIES
REAL ESTATE
DLF: INDIAS LARGEST REAL ESTATE COMPANY BY VALUE
1940 1950 1980 1990 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
2016
Source: Company website, TechSci Research,
DECEMBER 2016 Note: sq ft - Square Feet
For updated information, please visit 38
REAL ESTATE
GODREJ PROPERTIES UNIQUE ASSET-LIGHT BUSINESS MODEL (1/2)
Key Facts Distribution of ongoing and forthcoming projects by
area (FY16)
Started its first project in Mumbai in 1990
CAGR: 14.5%
416.7
68
CAGR: 30.5%
52.6
46.8
33.1
161.3
26.4
127.2 119.2 23.1
96.2 99.1 90.1 18.7 17
64.5
FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16
Recently launched Gardens Galleria in Bengaluru, Mohali & Noida, Great India Place in Bhopal & Dehradun as well as
Downtown in Mohali
ANSAL API
Hold 8,803 acres of land reserve in the major states of Haryana, Uttar Pradesh, Punjab and Rajasthan
SOBHA DEVELOPERS
It has completed 278 contractual projects as well as 111 real estate projects covering almost 81.64 million square feet
USEFUL INFORMATION
REAL ESTATE
INDUSTRY ASSOCIATIONS
Builders' Association
of India (BAI)
G-1/G-20, Commerce
Centre, J. Dadajee
Road,
Tardeo, Mumbai
400034
Tel: 91 22 23514134,
23514802, 23520507
Fax: 91 22 23521328
E-mail: bai@vsnl.com,
baihq.mumbai@gmail.com Website:
www.baionline.in
Index
IT/ITeS: Information
Technology/Information
Technology enabled Services
MNC: Multinational
Corporation
DECEMBER 2016
USD: US Dollar For updated information, please visit 44
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REAL ESTATE
EXCHANGE RATES