Recent Study: India Real Estate Report Q1 2015

There is huge long-term potential in India's commercial real estate market as the country builds on its status as a global IT and outsourcing hub and becomes open to more foreign investment, and as the spending power of the expanding middle class continues to grow. The economy is also beginning to rebound, and although in the short term we see no rise in rental rates, risks are to the upside.

Growth in India's commercial real estate market will be supported by an uptick in economic growth. Data from the first quarter (April-June) of the 2014/2015 financial year indicate that the economy grew by 5.7% year-on-year (y-o-y) in real terms, and we forecast growth of 5.6% in 2014/2015 (April-March), supported by regulatory improvements and an increase in investment as well as strong growth in exports, industrial output and services output. These improving fundamentals will boost demand for real estate, as businesses expand and their operating environment improves.

Full Report Details at
- http://www.fastmr.com/prod/912329_india_real_estate_report_q1_2015.aspx?afid=301

Recent Developments

* A loosening on restrictions on the sale of FDI-manufactured goods should boost demand for industrial real estate.
* In September 2014, Swedish furniture retailer Ikea said that it was looking to develop its own stores in India.
* Nitesh Estates is reportedly looking to buy the Plaza Centre Mall in Pune.
* US-based Blackstone has been making and considering a number of acquisitions in India in recent months. In September 2014, it bought two office properties, in Noida and Pune, from IDFC Alternatives Lt d. Blackstone was also said to be in negotiations to buy an IT special economic zone in Noida from 3C.

Key BMI Forecasts

* We see no change in rental rates in any of the sub-sectors we cover in 2015 and 2016.
* Office rental rates will remain highest in Mumbai, at up to USD65 per square metre (sq m) per month.
* Retail rents are the highest of the three sub-sectors that we cover, with the highest also being in Mumbai, at between USD28 and USD90 per sq m per month.
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The India Real Estate Report features Business Monitor International (BMI)'s market assessment and independent forecasts of major construction projects in the residential and commercial markets, plus rental prices and yields in major cities. The report critically analyses the prospects for real estate within the broader economic and financial context - both domestic and global - via our econometrically-modelled and clearly explained banking and economic forecasts and follows this through to evaluate the implications for REITs.

BMI's India Real Estate Report provides industry professionals and strategists, sector analysts, business investors, trade associations and regulatory bodies with independent forecasts and competitive intelligence on the real estate industry in India.

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