Indian real estate sector poised for US$10 tn growth by 2047

The Indian real estate sector has seen over US$ 60 billion in institutional investments, largely from foreign players, in the last decade, according to a report by Colliers and Credai. The sector is projected to reach a US$ 10 trillion valuation by 2047, with its share of India’s GDP expected to increase from the current 7.3% to 14-20%. The report highlights that foreign capital inflows will likely grow due to India’s strong economic prospects, FDI relaxations, and improvements in the ease of doing business.

The report predicts increased adoption of alternative funding methods in Indian real estate, supported by both foreign and domestic investors. It suggests that green financing, including bonds and credit issuances, will become more prominent. Additionally, newer financing options like social impact funds, distressed assets, and venture capital are expected to grow in popularity.

Emerging real estate segments, such as senior living, co-living, and data centres, are forecasted to experience rapid growth. Technological advancements and a focus on sustainability and energy efficiency are becoming standard in developments. Credai’s president, Boman Irani, notes that consumer preferences are evolving, driving this shift.

The report also projects significant urbanisation, with nearly half of India’s population expected to live in urban centres by 2047. This urban expansion will likely extend beyond Tier-I cities, creating new growth opportunities in smaller towns, spurred by infrastructure development and employment growth.

The real estate regulatory authority (RERA) and real estate investment trusts (REITs) regulations have improved transparency and boosted investor confidence. Asset classes under REITs are expected to diversify, incorporating warehouses, hotels, and residential properties in the coming years, with data centres, hospitals, and senior living accommodations seeing long-term growth in financing avenues.