RBETA 2024 set to celebrate India’s tech-enabled real estate expansion

Real estate market overview:  real estate sector in India is expected to reach $1 trillion in market size by 2030, up from $ 200 billion in 2021 and contribute 13 per cent to country’s GDP by 2025, according to India Brand Equity Foundation. Retail, hospitality, and commercial real estate segments are also growing, providing much-needed infrastructure for India's growing needs.

If real estate sector continues to follow estimated growth trajectory, it is expected to expand to $ 5.8 trillion by 2047, contributing 15.5 per cent to GDP from an existing share of 7.3 per cent.

To commemorate exceptional growth, innovation, and technological vancements in India's real estate sector, Republic Business is proud to announce inaugural edition of Republic Business Emerging Tech Awards 2024 (RBETA 2024) dedicated to real estate industry.

RBETA 2024 will highlight major strides me by real estate sector in harnessing technology to change tritional practices. By embracing innovative solutions, sector aims to improve efficiency, transparency, and accessibility across all facets of real estate ecosystem.

Tech-enabled growth 

A recent survey conducted by KPMG India reveals that 90 per cent of real estate developers in India are embracing technology to improve ir operational efficiency. This option includes innovative interventions like ConTech and PropTech, which integrate finance process automation with cutting-edge technologies such as AI, IoT, and analytics, all integrated with Big Data. This concerted effort is set to yield immediate impacts on businesses.

In response to pressing challenge of constructing environmentally sustainable structures, developers are increasingly turning to modern technologies to mitigate ir carbon footprint. According to Indian Green Building Council (IGBC), green building market in India is projected to surge to $50 billion by 2025.

Smart building technologies, characterised by vanced sensors, automation systems, and seamless connectivity, are gaining popularity for ir ability to improve efficiency, safety, and overall functionality of both commercial and residential buildings. se technologies aim to make buildings more responsive to occupant needs while simultaneously reducing energy consumption and operational costs.

Global investment in India

In 2023, private equity investments in India's real estate sector reached $4.2 billion. From April 2000 to September 2023, foreign direct investment (FDI) in sector, including construction development and related activities, amounted to $58.5 billion. second quarter of 2023 saw robust private equity investments of $1.92 billion in Indian real estate sector. 

According to estimates by ICRA, Indian firms were projected to raise over $ 48 billion through infrastructure and real estate investment trusts in 2022, compared to $29 billion alrey secured. 

Foreign institutional inflows into India's real estate sector also experienced a three-fold increase, totalling $26.6 billion during 2017-2022.

In July 2021, Securities and Exchange Board of India (SEBI) reduced minimum application value for Real Estate Investment Trusts (REITs) from Rs. 50,000 ($685.28) to Rs. 10,000-15,000 ($137.06 - $205.59), to enhance accessibility for small and retail investors. 

Notably, private market investor Blackstone, a major player in Indian real estate sector with investments worth $50 billion, is planning to inject anor $22 billion by 2030, according to India Brand Equity Foundation.

Favourable Government policies 

Government of India, in collaboration with state governments, has implemented multiple initiatives to speed up growth in real estate sector. Smart City Project, under which government is developing 100 smart cities, presents major opportunities for real estate companies. Here are some key governmental efforts:

• In Union Budget 2023-24, Finance Ministry has set aside $9.64 billion for PM Awas Yojana, a 66 per cent increase from previous year's allocation.
• In October 2021, Reserve Bank of India (RBI) maintained benchmark interest rate at 4 per cent, providing a boost to real estate sector. continuation of low home loan interest rates was expected to stimulate housing demand, potentially increasing sales by 35-40 per cent during festive season of 2021.
• Union Budget 2021-22 extended tax deductions of up to Rs. 1.5 lakh ($2069.89) on interest on housing loans and granted a tax holiday for affordable housing projects until conclusion of fiscal year 2021-22.
• Atmanirbhar Bharat 3.0 package, unveiled by Finance Minister Nirmala Sitharaman in November 2020, included income tax relief measures for real estate developers and homebuyers. measures applied to primary purchases/sales of residential units valued up to Rs 2 crore ($271,450.60) from November 12, 2020, to June 30, 2021.

Strong multi-dimensional demand 

In latter half of 2020, office market across top eight cities recorded transactions totalling 22.2 million square feet (msf), while new completions stood at 17.2 msf during same period. 

Information Technology (IT/ITeS) sector led sectoral occupiers with a commanding 41 per cent share, trailed by Banking, Financial Services, and Insurance (BSFI) sector, and manufacturing sector, each comprising 16 per cent. Or Services and co-working sectors accounted for 17 per cent and 10 per cent, respectively.

In 2020, manufacturing sector secured 24 per cent of office space leases, amounting to 5.7 million square feet. 

Luxury home sales in India also surged by an impressive 130 per cent in first half of 2023 compared to corresponding period of previous year.

According to Mordor Intelligence, India Luxury Residential Real Estate Market size is estimated at $38.02 billion in 2024 and is expected to reach $101.92 billion by 2029, growing at a CAGR of 21.81 per cent during forecast period (2024-2029).

(Data Sources: Knight Frank India, VCEdge, JLL Research, CREDAI-JL)