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Under-construction projects in India top $100bn

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    Under-construction projects in India top $100bn


    MUMBAI: The total market value of under-construction projects in India has crossed the $100-billion (Rs 4.5 lakh crore) mark for the first time in 2010. Of this, Mumbai, the country's financial capital, where property prices are some of the highest in the world, has nearly a 40% chunk ($37 billion, or Rs 1.66 lakh crore). The under-construction projects include residential, commercial and retail space.

    The findings are in the latest Real Estate Intelligence Service (REIS) report prepared by Jones Lang LaSalle Meghraj.

    "India's top 100 developers are currently setting up 7.5-8 lakh apartments in the top seven metros - Delhi, Mumbai, Chennai, Bangalore, Kolkata, Pune and Hyderabad," said Abhishek Kiran Gupta, head of REIS.

    "The market value of real estate under construction in India has increased from $69.4 billion in 2006-end to $101.3 billion in June 2010, which equals 8.2% of India's nominal GDP for 2009," the report said. The market value and costs of development have been estimated at prevalent property prices and costs of construction, considering the variance in asset classes and geographical locations, it added.

    The residential component contributes 66% ($66.5 billion) of this $101.3 billion, while the rest is contributed to by commercial office and retail space combined. The premium segment comprises only 4% of the saleable area being developed, but to 24% of the market value. "While NCR- Delhi leads in terms of volume of residential properties being developed, Mumbai contributes a larger share to the market value," it said.

    On the other hand, the market value of commercial office and retail under construction has remained range-bound during 2006-2010 due to the effect of an increase in construction activity offset by a fall in capital values. "However, the contribution of residential has amplified due to a confluence of increase in construction activity and rapid recovery of property prices," the report said.

    The market value of commercial (office and retail) real estate under construction is $34.8 billion and commercial office space under development contributes to 74% of the estimated market value being developed in the commercial sector.

    "As of 2Q10, Tier-I cities of Mumbai, NCR-Delhi and Bangalore contribute to 70% of the market value of under-construction commercial office space, while Tier II cities of Chennai, Pune, Hyderabad and Kolkata contribute to 21% of the pie. Other investment grade developments in Tier III cities contribute to a mere 9% of the pan-India market value being developed in India today."

    According to the report, since 2007-08, a total foreign direct investment of $7.82 billion (over Rs 35,000 crore) has been put into housing and real estate in India.


    Under-construction projects in India top $100bn - The Times of India