There is still a shortage of 18 million homes in India and the country needs $330 billion by way of funding for construction in this regard. The current gross bank credit available for the sector is lower than $55 billion as per reports. In case the entire real estate sector is considered apart from residential housing, the funding requirements are huge according to several studies.
With RERA and other reforms, Indian real estate has started its transformation towards being a highly transparent sector which has spurred interest from several global funds looking to invest in the residential and other sectors. There is ample scope for professional real estate advisors who are organized since there are several big deals in the offing. There is a need for advisory services for real estate, given the shortage of homes and the funding requirements. These firms should be equipped for advising investors on several real estate asset classes and there should be ample banking expertise involved as well.
Several large sized realty deals are expected this year and there is major interest expected from the investment banking sector as well. The major focus will continue to be residential housing, particularly in the affordable space followed by hospitality and hotels, warehousing, land and logistics among other related realty sectors. There will be more insurance companies, private equity funds and capital providers entering the sector.
There are high quality office assets available in the country at present which are available at comparatively attractive prices. These will draw ample investments from the equity space. The residential sector will be on the lookout for several funding options in this space as well. There is ample interest in logistics and warehousing development as well as per reports. In the year 2017, there was a whopping $4.2 billion in investments that went into the real estate industry which was a tad lower than 2016. This number is expected to rise this year and in case there is the launch of REITs (real estate investment trusts), the figures in 2016 may be outstripped with ease as per the latest reports.