- Current disruptions in four cornerstones of the real estate sector - Regulation, Finance, Customers and Technology, will help facilitate a new transformed ecosystem, at par with major economies
London, August 11, 2017: CREDAI in association with its knowledge partner CBRE, today released a report “Indian Real Estate in 2017 and Beyond” at its 17th Annual International Convention, NATCON 2017 in London. The report encapsulates the major policy related disruptions by Government of India which are challenging the traditional operating environment by setting a new foundation for change. According to the report, a conjecture of measures - RERA, GST, REITs are aimed at improving transparency in the sector, increasing the share of organized segment and enhancing the overall investor sentiment. This will help in catalysing ease of doing business in the country while supporting corporate entities entering or expanding their footprint in India.
It anticipates that breakthrough disruptions in four cornerstones – Regulation, Finance, Customers and Technology are likely to have positive insinuations on the sector and will facilitate a new ecosystem which will be more conducive. With RERA, GST and I-REITs becoming a reality in 2017, Government has definitely taken a lead in challenging the operating fabric with regulatory disruptors and making Affordable housing the growth catalyst in the residential segment. The report further talks about how a favourable regulatory environment, coupled with attractive asset valuations are enhancing the investor confidence significantly by changing the perception of Indian realty in the global arena. This is evident from an unprecedented interest from offshore equity investors, large Indian corporates and high net worth individuals (HNIs) which is roughly estimated to reach at 7 billion USD in 2017. Furthermore, it states that while office and residential are expected to remain traditional drivers for the industry; alternate sectors, such as retail and warehousing will also come to the forefront.
The report also insights into the changing disruption in customer preferences in office, retail, residential and warehousing space. For instance, the dynamics in office spaces are being disrupted with the entry of millennials – Over two-thirds of the Indian Millennials feel quality of ‘Office design’ impacts their productivity to large extent. While in warehousing segment - entry of international players is ensuring that better and larger warehouses emerge in key markets; in residential segment - customers will have a say in operations with effective grievance redressal. Customer experience has also become at the heart of retail’s strategy which is fuelling future trends like customization and hyper customization. As per the survey, more than 40% of retailers in cities such as Noida, Gurgaon, Delhi, Mumbai, Kolkata etc. preferred locating in the malls, as they serve as experience destinations.
The report concludes by observing new disruptions in Technology, infusing all other cornerstones like online registration of developers under RERA, GST rate finder app, automation and robotics in the office segment and company.
On the occasion of unveiling the report, Mr. Jaxay Shah, President, CREDAI National commented, “Government’s aggressive push to formalize, regulate and encourage investment to the sector with a slew of measures like RERA, REITs is consolidating India’s position on global map. We believe that these disruptions and encouraging trends will definitely manifest a more exciting future which will be full of possibilities and opportunities for Indian real-estate.”
While releasing the report, Anshuman Magazine, Chairman, India & South East Asia, CBRE said, “In this burgeoning Indian economy, the one sector that has emerged from the restraints of the past is Real Estate. The real estate sector in India is one of the key contributors and mainstays for India’s development as a nation. Real estate in India continues to be in a dynamic phase and the pace at which the four cornerstones – Regulation, Finance, Customers and Technology are evolving, a more than incremental transformation in the sector is expected in the coming years. In this report we have dwelled on how a strong foundation for this change has already been laid with a conducive operating environment, the future growth of the sector will be determined by many other factors”.