Increase in india real estate needed to meet demands
A study conducted by property firm Cushman & Wakefield India has revealed that the country will need approximately 240 million sq. ft of commercial property and about 4.25 million units of residential real estate to meet the demand in the coming four years...
About 70% of the total estimated demand for residential units during this period is expected from the mid-range and affordable segments, the study said. It also estimates demand for retail space of about 55 million sq.ft. with the current oversupply situation likely to stabilise only by 2013. The hospitality sector is expected to see demand of about 78 million room nights during the period.
Around 60% of the total estimated pan-India residential demand by 2014 is expected to be from India's top-seven cities, with tier-I metros, like the National Capital Region (NCR) and Mumbai, expected to account for around 40% of the total demand, the firm said in a report released on Wednesday. Mumbai is likely to witness the highest cumulative demand of 830,000 units as well as growth of 23%, followed by the NCR, which is likely to witness a growth of about 20%.
The housing sector has seen a rise in demand over the last two to three quarters. However, the supply largely remains constrained due to the slow pace of construction activity during 2009-10. As a result, demand across the top-seven cities is estimated to be three times the supply during 2010-14, it said.
The ratio will, however, differ across segments: the demand from the affordable and mid-range segment is expected to be three times the supply, while from the economically weaker section, it will be six times; the high-end segment is expected to witness a demand-supply gap of approximately 1.5 times, despite the likely oversupply scenario in tier-I cities in the medium-term, the report said.
About 46% of the pan-India office space demand estimated over the next five years is likely to be from Bangalore, NCR and Mumbai, signifying their continued predominance, the study said. Tier-II cities, such as Kolkata and Chennai, are, however, likely to generate demand at a faster pace, at an annual rate of about 22% and 17%, respectively.
Source: Indian Realty News