Indian Real Estate Markets: a Perfect Storm

A perfect storm of demographic and economic factors is converging in India, and it is underpinning an unprecedented cycle of growth in the subcontinent’s real estate market.

With the fastest growing population in the world, India now has an increasingly urbanised and wealthy consumer base too and it is acting as a key driver for this, the fastest growing large economy on the planet which is now experiencing an unprecedented demand for domestic housing and new commercial (especially in social housing in its densely populated conurbations). So it should come as no surprise to learn that real estate investment on the subcontinent is now a core part of Red Ribbon’s investment strategy, helping to generate above market rate returns for its investors in one of the most exciting Growth Markets anywhere in the World.

And that’s not all, because these trends on the subcontinent are showing little sign of slowing down. On the contrary, they are likely to escalate still further according to October’s highly influential Cushman & Wakefield Report (“Winning in Growth Cities”) which has collected together data compiled from an exhaustive survey of no less than 400 global investment locations.

The Report found that real estate investment in India's six major cities alone has doubled in the first half of this year to a staggering $2.87 Billion, with Mumbai taking the lion’s share as might be expected, pushing it to a worldwide investment ranking of 81st (up from 149th  last year). And that figure of $2.87 Billion, in case you were wondering, represents an increase of more than 100% on the equivalent figure from 2016. Mumbai also ranked number one in absolute growth terms amongst the so-called “gateway cities” worldwide, with a 194% increase in investment from last year (only Pune outshone its more illustrious neighbour, with an astonishing 285% growth in investment).

There can be little doubt as to the strength of India’s real estate sector.

And in terms of segmented participation in the global investment pot, Cushman’s Report found that more than 55% was sourced from the United States; European investment accounted for roughly 14% and the bulk of the rest came from local investment (a further pointer to the core strengths of the economy).

Anshul Jain, Country Head and Managing Director of Cushman & Wakefield in India, put his finger on the significance of this for the wider Indian economy:  "Current economic drivers are biased towards developed markets, but Indian cities are performing ahead of expectations and are clearly offering superior medium to long-term growth potential in real estate."

Jain went on to say that further afield from the subcontinent’s more established markets, the new manufacturing hub centres of Chennai, Hyderabad and Pune are also proving to be attractive for real estate investment, driven in particular by their burgeoning production and assembly facilities in the automobile, engineering and pharmaceutical sectors.

Red Ribbon CEO, Suchit Punnose said:

With no sign of the exponential growth in India’s Real Estate market slowing down anytime soon, last month’s influential Cushman & Wakefield Report (“Winning in Growth Cities”) has highlighted staggering progress in the sector over the past year. Investment in India & it's six major cities alone has doubled in the first half of the year to $2.87 Billion, with Mumbai taking the lion’s share pushing it to a worldwide ranking of 81 st (up from 149th last year). And Mumbai is also ranked number one in absolute growth terms amongst the so-called “gateway cities” worldwide, with a 194% increase in investment from last year (only Pune outshone its more illustrious neighbour, with an astonishing 285% growth in investment). It all goes to underpin just why India is currently the most exciting Growth Market on the Planet.

Read the Cushman & Wakefield Report here

Read about the Indian Manufacturing Hub here

Read more about the Demographics underpinning Indian Real Estate Growth here