by Mr.Santhosh Kumar, JLL India
The election of the
BJP Government at the centre was just the beginning. Now, political control of
Maharashtra and Haryana - the country's most crucial commercial nerve centres -
is also on the charts, and there is every reason to anticipate an unprecedented
pace of revival in these markets' real estate sectors.
This revival will be
largely driven by an increased inflow of real estate investments through
Public-Private Partnership (PPP).
Mumbai and Gurgaon
have the lion’s share of the pie when it comes to the Indian realty market, and
both these cities have been witnessing tremendous growth in absorption of
commercial spaces over the past couple of years.
With the burgeoning
growth in population and migration of people from smaller cities to these
areas, there is huge requirement of residential spaces as well.
In terms of
percentage, both these cities combined account for 30-35% of the total Indian
real estate market. The office space supply in Mumbai is slated to be as high
as 30 million sqft. by 2018, with a value of around Rs. 700 billion. In terms
of residential units, there are around 1.5 lakh units under construction till
date, with an estimated value of around Rs. 2000 billion.
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| Mr. Santhosh Kumar, JLL India |
The office space
supply in Gurgaon is expected to be around 20 million sqft. by 2018, with a
value of around INR 200 billion. In terms of residential units, there are
around 80,000 thousand units under construction till date, with an estimated
value of around Rs. 500 billion.
The BJP government at
the centre has already made it lucidly clear that it will provide focused
impetus to infrastructure growth in the country. This effect will be further
amplified by the party's formation of the State governments in Maharashtra and
Haryana, with infrastructure in these two states becoming the biggest gainers.
Major PPP
Infrastructure PPP Projects Pipeline - Mumbai:
The Navi Mumbai
International Airport at Panvel
The Mumbai Trans
Harbour Link, which has been delayed since 2004, is expected to kick start
Expansion of Mumbai
Metro
Major PPP
Infrastructure Projects Pipeline - Gurgaon:
Expansion of the MRTS
line in Gurgaon
Various residential
projects coming up in the city.
The major bottleneck
for the real estate markets in these two cities has been the complex and
lengthy approval procedures. Developers in both markets are largely
cash-strapped and need better fund flows to come up with new supply.
We are now looking at
a potential end to this deadlock - with the BJP coming to political power in
Maharashtra and Haryana, there will be sufficient grounds to expect that the
party will focus on clearing up procedural delays arising from various complex
norms.
The ensuing boost to
growth will not be limited to just Mumbai and Gurgaon. Given the limited land
available for development in the two cities and factoring in the BJP's strong
focus on faster and more holistic growth, there is now added impetus for
development in their peripheral areas on the charts, as well. Infrastructure
such as highways and MRTS projects which will connect these areas to their
parent cities will automatically boost their real estate markets.
About the author..
Mr.Santhosh Kumar is
CEO at Operations and International Director at JLL India
For Media Contact
Mr. Arun Chitnis
Head – Corporate
Communications & Media Relations
JLL India
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