Assessing the Potential of the Real Estate Industry in India
Background and Challenge
A Singapore based fund house was interested in the growing Indian real estate market. The company wanted to understand the following key dynamics of the Indian real estate market:
- Fundamental growth drivers
- Market potential
- Market potential in key cities/ towns
The company also wanted to understand the competitive landscape, for example:
- Existing real estate funds
- Key Service and Product offerings
- Market strategies adopted etc.
Approach and Recommendations
To assess the potential, UC adopted the following approach:
- Identified key growth drivers for the real estate market
- Conducted detailed analyses of each growth driver and its impact on the real estate scenario in 41 cities/ towns
- Some of the factors analysed were -
1) No. of sq. feet to be added in information technology, information technology enabled services and retail
2) Existing and emerging manufacturing clusters
3) Number of hotel rooms to be added, medical tourism etc.
4) Investments to be made in special economic zone (SEZ), No. of SEZs, approval status etc.
5) Derived growth in residential segment
6) Housing loans disbursed and likely growth etc.
- Analysed case studies for the impact of malls, hotels, SEZs etc. on the real estate prices and hence the likely potential of price inflation in cities
- Identified key cities based on parameters that are likely to have a high growth potential
- Landscaped competition in the real estate fund segment, for example -
1) Size of fund
2) Type of fund (domestic, international)
3) Fund’s geographic focus (Tier I, II, II cities) etc.
4) Asset types focus (commercial, residential, retail, SEZ etc.)
- Highlighted key challenges and risks facing the real estate markets in India
UC delivered to the client the specific details and future possibilities of the real estate sector in India.