Business Monitor International


India Real Estate Report

Published 25 November 2014

  • 83 pages
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  • Includes 3 free updated quarterly reports
 
$1,295.00
India Real Estate Report

BMI View: There is huge long-term potential in India's commercial real estate market as the country builds on its status as a global IT and outsourcing hub and becomes open to more foreign investment, and as the spending power of the expanding middle class continues to grow. The economy is also beginning to rebound, and although in the short term we see no rise in rental rates, risks are to the upside. 

Growth in India's commercial real estate market will be supported by an uptick in economic growth. Data from the first quarter (April-June) of the 2014/2015 financial year indicate that the economy grew by 5.7% year-on-year (y-o-y) in real terms, and we forecast growth of 5.6% in 2014/2015 (April-March), supported by regulatory improvements and an increase in investment as well as strong growth in exports, industrial output and services output. These improving fundamentals will boost demand for real estate, as businesses expand and their operating environment improves.

Recent Developments

  • A loosening on restrictions on the sale of FDI-manufactured goods should boost demand for industrial real estate.

  • In September 2014, Swedish furniture retailer Ikea said that it was looking to develop its own stores in India.

  • Nitesh Estates is reportedly looking to buy the Plaza Centre Mall in Pune.

  • US-based Blackstone has been making and considering a number of acquisitions in India in recent months. In September 2014, it bought two office properties, in Noida and Pune, from IDFC Alternatives Lt d. Blackstone was also said to be in negotiations to buy an IT special economic zone in Noida from 3C.

Key BMI Forecasts

  • We see no change in rental rates in any of the sub-sectors we cover in 2015 and 2016.

  • Office rental rates will remain highest in Mumbai, at up to USD65 per square metre (sq m) per month.

  • Retail rents are the highest of the three sub-sectors that we cover, with the highest also being in Mumbai, at between USD28 and USD90 per sq m per month.

  • ...

Table of Contents

BMI Industry View
7
SWOT
9
Political
11
Economic
13
Business Environment
15
Industry Forecast
17
Office
18
Table: Office Forecast Rents - 2014/15 (USD/sq m/month)
18
Table: Office Short-Term Net Yield Forecast (%)
19
Table: Office Medium-Term Net Yield Forecast (%)
20
Retail
20
Table: Retail Forecast Rents - 2014-2015 (USD/sq m/month)
21
Table: Retail Short-Term Net Yield Forecast (%)
21
Table: Retail Medium-Term Net Yield Forecast (%)
22
Industrial
22
Table: Industrial Forecast Rents - 2014/15 (USD/sq m/month)
23
Table: Industrial Short-Term Net Yield Forecast (%)
23
Table: Industrial Medium-Term Net Yield Forecast (%)
24
Construction And Infrastructure Forecast Scenario
25
Table: Construction And Infrastructure Industry Data (India 2012-2017)
25
Table: Construction And Infrastructure Industry Data (India 2018-2023)
26
Table: Factbox - Key Elements On India's Land Acquisition Bill 2013
36
Macroeconomic Forecasts
38
Downgrade Due To Significant Pull-Back In Capital Spending
39
Waning Private Consumption Growth Poses Further Downside Risks
39
Not All Gloom: Data Could Boost BJP's Position
40
Table: India - Economic Activity
41
Industry Risk Reward Ratings
42
Asia - Risk/Reward Ratings
42
Table: Asia Real Estate Risk/Reward Ratings, Q314
42
India - Risk/Reward Ratings
43
Rewards
43
Risks
44
Market Overview
45
Office
51
Table: Historic Rents - 2012-2014 (USD/sq m/month)
52
Table: Terms of Rental Contract/Lease - H213
53
Table: Net Yield, 2012-2014 (%)
54
Retail
54
Table: Terms of Rental Contract/Lease - H213
57
Table: Net Yield, 2012-2014 (%)
58
Table: Historic Rents - 2012-2014 (USD/sq m/month)
59
Industrial
59
Table: Historic Rents - 2012-2014 (USD/sq m/month)
59
Table: Net Yield, 2012-2014 (%)
61
Table: Terms of Rental Contract/Lease - H213
62
Competitive Landscape
63
Company Profile
68
Ambuja Cements
68
DLF
70
Parsvnath Developers
72
Sobha Developers
74
Demographic Forecast
76
Table: India's Population By Age Group, 1990-2020 ('000)
77
Table: India's Population By Age Group, 1990-2020 (% of total)
78
Table: India's Key Population Ratios, 1990-2020
79
Table: India's Rural And Urban Population, 1990-2020
79
Methodology
80
Industry Forecast Methodology
80
Sources
81
Risk/Reward Ratings Methodology
81
Table: Real Estate Risk/Reward Ratings Indicators
83
Table: Weighting Of Indicators
84

The India Real Estate Report features Business Monitor International (BMI)'s market assessment and independent forecasts of major construction projects in the residential and commercial markets, plus rental prices and yields in major cities. The report critically analyses the prospects for real estate within the broader economic and financial context - both domestic and global - via our econometrically-modelled and clearly explained banking and economic forecasts and follows this through to evaluate the implications for REITs.

BMI's India Real Estate Report provides industry professionals and strategists, sector analysts, business investors, trade associations and regulatory bodies with independent forecasts and competitive intelligence on the real estate industry in India.

Key Benefits

  • Benchmark BMI's independent real estate industry forecasts for India to test other views - a key input for successful budgeting and strategic business planning in the Indian real estate market.
  • Target business opportunities and risks in India through our reviews of latest industry trends, regulatory changes and major deals, projects and investments.
  • Assess the activities, strategy and market position of your competitors, partners and clients via our Company Profiles (inc. SWOTs, KPIs and latest activity).

Coverage

BMI Industry View

Summary of BMI's key industry forecasts, views and trend analysis covering real estate and construction, regulatory changes, major investments and projects and significant national and multinational company developments.

Industry SWOT Analysis

Analysis of the major Strengths, Weaknesses, Opportunities and Threats within the real estate sector and within the broader political, financial, economic and business environment.

Market Overview

Overview of the real estate sector, including analysis of existing/planned real estate developments and emerging industry trends in the office, industrial and commercial sectors.

Market Analysis

Features detailed city-level data and analysis on rental prices, yields, contract terms and real estate availability with separate chapters covering the office, retail and industrial sub-sectors.

Industry Forecast Scenario

Historical data series (2010-2012) and forecasts to end-2018 for the domestic real estate industry and for the local and global finance industry. Indicators include:

Real Estate: Office, retail and industrial real estate yields for all major cities (%); short-term forecasts on minimum and maximum real estate rental prices by sub-sector (US$ per square metre, and local currency per square metre)

Construction: Industry value (US$bn); contribution to GDP (%); employment (`000); real growth (%)

Economy: Economic growth (%); nominal GDP (US$bn); unemployment (%); interest rates (%); exchange rate (against US$)

Business Environment Rankings

BMI's Real Estate Business Environment Rankings provide a country-comparative Risk-Reward Rankings index aimed at investors (real estate vendors, construction companies and financial investors) in the regional real estate market.

The rankings methodology makes sophisticated use of over 40 industry, economic and demographic data points.

Company Profiles

Examines the competitive positioning and short- to medium-term business strategies of key industry players. Strategy is examined within the context of BMI's industry forecasts, our macroeconomic views and our understanding of the wider competitive landscape to generate Company SWOT analyses.

The latest financial and operating statistics and key company developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects.

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Testimonials

'An essential, multi-faceted research tool. BMI’s thorough understanding of the major market players enables an informed – and informative – review of the sector’s actual performance, together with useful insights into current industry issues, which are topped-off with detailed and invaluable forecasts of industry and macroeconomic trends.’

Senior Research Analyst, ABC International Bank plc