Real estate demand to cross 1,000-mn sq ft mark by 2012

The real estate demand in various segments in the country would cross the 1,000-million sq ft mark by 2012, a real estate investment report said.

"Indian demand for real estate across office, retail, residential and hospitality sectors is expected to cross 1,000 million sq ft by 2012," said Cushman & Wakefield and GRI in The Metamorphosis, a report on India Real Estate Investment for 2008.

The residential segment continues to drive real estate demand with 687 million sq ft, contributing 63 per cent throughout the term under consideration, the report said.

"Despite the expected slowdown in the office market, the demand for commercial office space is projected to be 243 million sq ft, which is around 22 per cent of the total demand projections for the next five years," it said.

The retail and hospitality segments were expected to constitute 95 million sq ft (9 per cent) and 73 million sq ft (6 per cent) of this total demand, respectively, C&W said.

"In the long-term, strong demand for real estate in India will remain intact and will probably see us through another real estate cycle once the market finds its own level by responding to these short-to-mid term global and domestic factors," C&W joint managing directors, Anurag Mathur and Sanjay Dutt, said in the report.

A dynamic workforce, liberalised economy, robust demand for real estate across sectors were few factors which would make Indian market in the times to come more reliable for investment in the real estate sector, they said. 

The National Capital Region has emerged as a clear preference for sectors like retail, residential and hospitality while coming a close second in the office sector, Cushman & Wakefield said.

"The growing importance of the city can be gauged by the quantum of demand which it is likely to see," the report said.

While the commercial office sector would see a demand of 48-million sq ft, residential demand would be at 114-million sq ft by 2012, it said.

The growth of the retail and the hospitality sectors would follow with 19-million sq ft and 17-million sq ft of demand over the next 5 years, the  report said.

"The importance of NCR as an economic destination along with the upcoming preparations for the Commonwealth Games has ensured that NCR surpasses demands for these sectors over any other city," the report said.