Real Estate Roars: The Indian real estate sector is expected to soar to an estimated $1.5 trillion by 2034, constituting 10.5 per cent of the total economic output of the country, according to a report jointly published by the Confederation of Indian Industry (CII) and Knight Frank India. This projection marks a notable leap from the sector's 2023 valuation, standing at approximately $482 billion, contributing 7.3 per cent to the economy.

Residential market momentum

The residential segment dominated in driving this growth, expected to amass a value of $906 billion. Following closely behind is the commercial sector, poised to contribute $125 billion. Moreover, the analysis points out the escalating demand for land dedicated to manufacturing activities, estimated to generate a value of $28 billion, alongside warehousing ventures anticipated to yield revenues of $8.9 billion.

Delving into the intricacies of this growth narrative, the report highlights the important role of urbanisation, projecting a demand surge of 78 million new housing units in urban centres between 2024-2034. This demand surge is intricately tied to the anticipated population swell, with projections indicating an increase to 1.55 billion by 2034, with 42.5 per cent residing in urban areas. Furthermore, the demographic shift towards the middle-income brackets by 2034 is poised to catalyse significant demand for both affordable and luxury housing segments.

Commercial space surge

The commercial real estate sector's anticipated boom is notable too, necessitating an estimated 2.7 billion sq ft of additional office space by 2034. This expansion is fuelled by various factors, including business expansion, infrastructure development, and the rise of IT and service industries. Additionally, the report highlights the pivotal role of Global Capability Centres (GCCs) in driving office market growth, with projections indicating a rise to 2,880 by 2034.

Parallelly, the warehousing sector is expected to witness a robust demand surge, indicating growth opportunities in line with economic expansion. Projections suggest a requirement of 111 million sq ft by 2034, translating to an increase of 42 million sq ft over the next decade.

Private equity momentum

The report also addresses the surge in private equity investments, poised to reach $14.9 billion by 2034, with emerging sectors like data centres, healthcare, hospitality, co-living, and co-working spaces gaining traction amongst investors.