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A comprehensive report released by Knight Frank India, in collaboration with NAREDCO, forecasts a booming trajectory for India’s real estate sector, estimating its worth at a staggering USD 5.8 trillion by 2047. This monumental leap signifies a rise from the current 7.3% to a hefty 15.5% contribution to the nation's total economic output by that year.
This illuminating document, titled "India Real Estate: Vision 2047", was presented to the public by Shri M. Venkaiah Naidu, the ex-Vice President of India, during NAREDCO's Silver Jubilee Celebration held in Hyderabad.
By the centenary of India's independence in 2047, the country’s economy is predicted to flourish, reaching a valuation between USD 33 trillion to USD 40 trillion. Private equity investments, having exhibited consistent growth over the past twenty years, play a crucial role in this projection. In 2023 alone, the real estate sector is set to attract a whopping USD 5.6 billion in private equity investments, marking a YoY increase of 5.3%. Over the next quarter-century, these investments are set to catapult to USD 54.3 billion, showcasing a commendable CAGR of 9.5% from 2023 to 2047.
Knight Frank also highlighted the promising trends in the Indian REITs sector. Currently, the combined Indian REITs portfolio spans 84.9 million square feet, predominantly in office and retail assets. However, the versatility of REITs is set to expand, encompassing alternative assets like data centres, healthcare, and more in the ensuing 25 years.
Furthermore, housing demands are expected to undergo a considerable shift. While there's a potential demand for 230 million housing units over the next 25 years, preferences are anticipated to change. Although the immediate future will see affordable housing at the forefront, a gradual shift towards mid-segment and luxury housing is expected. This shift correlates with the evolving income brackets in India, indicating that by 2047, a mere 9% will belong to the lower income group, down from today's 43%. Moreover, a surge in the HNIs and UHNIs from 3% to 9% will augment the demand for luxury housing.
In the commercial realm, Knight Frank's analysis predicts a potential output of USD 473 billion by 2047, backed by 69% of the formally employed workforce. This growth is evident, considering the increase in office spaces across India's major cities. Finally, echoing the country's economic growth and heightened income levels, the warehousing market is forecasted to demand a massive 159 million sq ft by 2047, potentially yielding an output of USD 34 billion.
In conclusion, India's real estate sector, underpinned by robust economic growth, evolving housing preferences, and burgeoning private investments, is on the cusp of monumental growth. This expansion not only promises lucrative opportunities for investors but also signifies India's position as a global economic powerhouse by 2047.
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