In New Delhi: According to a joint report by Knight Frank and the National Real Estate Development Council (Naredeco), India’s real estate sector will grow to $5.8 trillion by 2047, contributing 15.5% to the country’s GDP, up from its current share of 7.3%.
According to the research “India Real Estate: Vision 2047,” the residential segment would dominate the real estate market.
It stated that when India celebrates 100 years of independence in 2047, its economy will be worth between $33 and $40 trillion.
Private equity investments in the Indian real estate market have risen steadily over the past 20 years, according to the report, and from a projected $5.6 billion in 2023 to $54.3 billion in 2047, a 9.5% annual growth rate, is predicted.
Rajan Bandelkar, president, Naredeco India said, “Significant expansion of the Indian economy by 2047, will be powered by Real Estate. A multifold economic expansion will boost demand across all the asset classes – residential, commercial, warehousing, industrial land developments etc – will grow at a multiplier rate to accommodate the growing needs of the economy and consumption needs of the individuals,”
A projected 230 million housing units will be needed in India over the next 25 years, according to Knight Frank India. The demand for housing is anticipated to continue to be focused in the mid-range and luxury dwelling segments. By 2047, only 9% of households will have lower incomes, down from the current 43%.
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Niranjan Hiranandani, National Vice Chairman of NAREDCO, opined that, “The northbound growth in the Indian Real Estate sector is driven by the favourable domestic economic environment with economic resilience, bolstered infrastructure growth plans, alternative investment models, and domestic consumption power. Growing GDP will stimulate commercial and industrial real estate growth, attracting global investors towards Grade A assets. Emerging alternative asset classes will also play a critical role in pooling investments and boosting investors’ confidence”.
The survey predicts that in addition to the office and retail sectors, REITs will also diversify their business operations in the upcoming years to include residential and warehouses.
For alternative asset classes including data centers, hospitality, healthcare, and education, builders may also consider investing in REITs.
84.9 million square feet (sq ft) total, of which 9 million sq ft is devoted to retail assets and 75.9 million square feet to office assets.
Additionally, the REITs sector is now under construction, with 21.3 million square feet of it expected to be finished in one to two years.
By 2047, a USD 36 trillion economic expansion will be supported by 69% of the working population being formally employed, according to forecasts from Knight Frank.
The estimated office stock is expected to produce potential output worth USD 473 billion in 2047, based on market valuation.
According to the report, the office stock in India’s top eight cities has increased dramatically from 278 million square feet in 2008 to 898 million square feet in 2022.
