Business Monitor International


India Real Estate Report

Published 11 April 2014

  • 83 pages
  • Instant access to your report online and PDF format through your account library
  • Includes 3 free updated quarterly reports
 
$1,295.00
India Real Estate Report

BMI View: GDP growth in India drop to the lowest level in over a decade in 2013 , while persistent structural issues ranging from the financial system to national infrastructure saw widespread capital flight in addition to record setting lows for the Indian Rupee against the dollar. All these factors represent a challenging environment for the commercial real estate sector.

Despite these challenges, the commercial real estate market has thus far managed to avoid significant downturns, although demand, vacancy rates and rental stability in the short term remain a cause for concern. Nevertheless, BMI shares the consensus opinion that both economic performance and aggregate demand will improve post 2014, as investors begin to return to an Indian market which continues to display solid growth potential. Despite this we have downgraded our real growth projections for private domestic demand leading us to downgrade our headline real GDP growth forecast to 5.0% for 2013/14 from 5.5% previously.

The present Indian government has attempted to induce economic reforms in addition to a national infrastructure redevelopment in the months leading to the 2014 parliamentary election. Reductions on levels of foreign project financing, in addition to more restrictive controls on international investment by domestic firms, has helped foster the emergence of new capital in addition to relieving the pressure on a government already heavily reliant on borrowing. The lack of large-scale development in 2013, especially in the office sector, had a neutralising effect on rents, which have marginally declined or seen no significant changes.

Despite recent economic slowdown the long term potential of the retail sector remains bright, with a growing middle class with an increased disposable income. Recent developments in the retail sector include: The UK's Tesco has received the go-ahead to invest US$110mn in a joint supermarket venture with the Tata Group conglomerate. The newly...

Table of Contents

BMI Industry View
7
SWOT
8
Business Environment
10
Economic
12
Political
14
Industry Forecast
16
Table: Office Forecast Rents - 2013 (INR per m2/month)
16
Table: Office Forecast Net Yield, 2010-2017 (%)
17
Table: Retail Forecast Rents - 2013 (INR per m2/month)
17
Table: Retail Forecast Net Yield, 2010-2017 (%)
17
Table: Industrial Forecast Rents - 2013 (INR per m2/month)
18
Table: Industrial Forecast Net Yield, 2010-2017 (%)
18
Construction And Infrastructure Forecast Scenario
18
Table: India Construction And Infrastructure Industry Forecasts, 2011/12 -2016/17
18
Table: India Construction And Infrastructure Industry Forecasts, 2017/18 -2022/23
20
FY2013/14: Structural Weakness
24
Macroeconomic Forecasts
30
Table: India - Economic Activity
35
Industry Risk Reward Ratings
36
Asia-Pacific Risk/Reward Ratings
36
Table: Asia Pacific Real Estate Risk/Reward Ratings
36
Business Environment Outlook
37
Table: BMI Business And Operation Risk Ratings
39
Table: BMI Legal Framework Rating
40
Table: Labour Force Quality
42
Table: Asia, Annual FDI Inflows
43
Table: Trade And Investment Ratings
44
Table: Top Export Destinations, 2004-2011
45
Tax Regime
45
Operational Risk
46
Market Overview
48
Office
58
Table: Historic Rents - (INR per m2/month)
59
Table: Net Yield, 2011-2012 (%)
60
Table: Terms of Rental Contract/Lease - H212
60
Retail
60
Table: Historic Rents - 2011-2012 (INR per m2/month)
63
Table: Net Yield, 2011-2012 (%)
64
Table: Terms of Rental Contract/Lease - H212
64
Retail Sales Indicators
64
Table: India Retail Sales Indicators, 2010-2017
64
Industrial
65
Table: Historic Rents - 2011-2012 (INR per m2/month)
65
Table: Net Yield, 2011-2012 (%)
66
Table: Terms of Rental Contract/Lease - H212
66
Competitive Landscape
67
Company Profile
74
Ambuja Cements
74
DLF
76
Parsvnath Developers
78
Sobha Developers
80
Demographic Forecast
82
Table: India's Population By Age Group, 1990-2020 ('000)
83
Table: India's Population By Age Group, 1990-2020 (% of total)
84
Table: India's Key Population Ratios, 1990-2020
85
Table: India's Rural And Urban Population, 1990-2020
85
Methodology
86
How We Generate Our Industry Forecasts
86
Construction Industry
87
Bank Lending
88
Real Estate/Construction Business Environment Rating
88
Table: Weighting Of Indicators
89
Sources
91

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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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