Regulatory developments would provide a boost to real estate
Driven by new trends along with regulatory developments that would significantly increase the transparency and efficiency, the real estate industry is undergoing through a paradigm shift.
A report jointly submitted by the Federation of Indian Chambers of Commerce and Industry (FICCI) and Ernst and Young, highlights numerous policy interventions within the sector, new emerging asset classes as well as developments within the South Indian realty market. It also addresses issues within the sector like IT-enabled business transformation, tackling fraud along with workforce management.
Surfacing trends:
As per the report, the Real Estate (Regulation and Development) Bill and other similar regulatory developments would encourage fair practices as it fixes the issues pertaining to accountability with the builder at every stage of development.
Litigation along with delay in projects is expected to reduce with the Land Acquisition, Rehabilitation and Resettlement Bill providing the guidelines and regulations for land compensation.
Furthermore, the relaxation of rules regarding the minimum built-up area within Special Economic Zones (SEZs) would provide an impetus to realty developers.
Emerging asset classes:
Asset classes such as senior living, affordable housing, education and healthcare realty, which proffer promising investment opportunities, have captured the focus of builders. Senior living and affordable housing cater to specific customer segment that is based on age and income, respectively.
With the Center’s pervasive budgetary focus on health and family welfare, the concept of “medical cities” is rapidly gaining visibility. Unique emerging asset classes in India are entertainment-related realty, like sports cities and amusement parks.
South Indian real estate:
Transit-oriented real estate (TORE) comprises the development of townships, industrial hubs, and retail along with office spaces around major industrial corridors, airports, dedicated freight corridors as well as metro rail.
The report notes that the development of dedicated freight corridors, modernization of major international airports and National Manufacturing Zones (NMZs) along with the existing and upcoming metro rail projects within key cities have driven the growth of TORE in India.
The steady increase and rise within literacy rates, the number of salaried professionals as well as the growth of the service industry are chief reasons credited to be driving the rise of the South Indian real estate sector wherein the demand is end-user driven.
Chennai’s real estate:
The city of Chennai, which already possesses a significant presence of IT/ITeS companies, has also emerged as a major export hub for the automobile industry driving the demand for realty.
Infrastructure projects comprising of the metro rail project along with the outer ring road along the periphery of the Chennai Metropolitan Area are expected to further boost the real estate development within the city.
The real estate industry is influenced by both internal factors such as workforce management and project execution and external factors like macroeconomic environment and initiatives taken by the Government.
