Business Monitor International


India Real Estate Report

Published 28 August 2014

  • 83 pages
 
$1,295.00
India Real Estate Report

BMI View: The considerable potential of India's commercial real estate sector is being undermined by a weak macroeconomic climate with manufacturing activity and consumer spending growth at multi-year lows. This uncertain backdrop has led demand to stagnate in some areas of the country, leading to oversupply and fluctuation in rental rates. India has nevertheless maintained its a ppeal as an affordable (and hence attractive) market for international real estate investment.

The election of Narendra Modi's Bharatiya Janata Party comes at a time of considerable flux for the Indian economy, which grew at its slowest rate for more than a decade in 2013 as both businesses and consumers cut back on spending and investment in the run-up to the May election. This sluggish growth trend has continued into 2014 with the commercial real estate market starting to feel the effects of weak demand across much of the market as businesses remain cautious and hold back on extending their premises.

The arrival of this uncertain climate comes as a stark contrast to the frenetic growth enjoyed by India's commercial real estate sector over the past few years as the rapid expansion of the country's services sector and a boom in middle class incomes drove demand for office and retail space. The biggest growth was seen in new tech cities such as Bangalore and Hyderabad, where rental rates have consistently grown at double-digit rates over the past few years as businesses jostle for space in an increasingly crowded rental market.

While H2 2014 will see a continued cooling in demand across much of the commercial property sector, the downturn is likely to be mild by international standards with Mumbai the only city for which we are forecasting a significant contraction in rental rates. BMI shares the consensus opinion that both economic performance and aggregate demand will start to pick up from 2015 as investors begin to return to an Indian market which continues to display solid...

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

Executive Summary

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-2017 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 Ratings

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

The ratings 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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