The real estate market in India is expected to grow significantly in the coming decades, driven by factors such as rapid urbanization, infrastructure development, and digitalization. According to a report by Colliers and CREDAI, the market could reach $10 trillion by 2047, accounting for 14-20% of the country's GDP.

The report notes that various real estate segments will evolve and proliferate, growing and maturing by varying degrees. Core assets such as office and residential real estate are likely to mature further, while alternative assets such as data centers and senior living will embark upon strong growth trajectories. Market consolidation, fair-pricing, and institutionalization will become more pervasive across asset classes, especially in the industrial and warehousing segment.

Shifting demographics and rising urbanization will also spur long-term real estate demand. With a significant portion of the Indian population likely to fall in the sweet spot of first-time homebuyers age-bracket, healthy traction across housing categories is expected in the next few decades. Additionally, a population with a significant share of older people can potentially speed up investments in the senior living market.

Infrastructure augmentation and policy-level push have enabled the Indian real estate to sail through multiple ebbs and flows of property cycles. Flagship programmes such as the Golden Quadrilateral Project, PM Gati Shakti Master Plan, ‘Make in India’ Programme and National Infrastructure Pipeline have positively impacted multiple real estate segments across the country, particularly the industrial and warehousing segment.

Over the next few years, asset classes under REITs/SM REITs will expand beyond office and retail to include warehouses, hotels, and rent-yielding residential properties. In the long-term, such financing avenues will become prevalent in alternate real estate verticals such as data centers, hospitals, educational institutes, senior and student living accommodations.

Institutional investments in the real estate sector in the last decade have crossed $60 billion, with the majority being funded by foreign players. The anticipated spurt in foreign capital and equally strong contribution from domestic investors will fast-track the adoption of alternate funding strategies in Indian real estate. Green financing in the form of bonds and credit issuances and relatively newer financing avenues such as social-impact, distressed, special situation, and venture capital funds will become more prevalent in the next few years.

Digitalization and sustainability will also become central themes going forward. The Indian real estate sector will increasingly embrace digitalization across aspects ranging from planning, design and construction to property and facilities management. PropTech and Metaverse are likely to mature and elevate Indian real estate to global standards of operational efficiency, transparency and accountability. Increased data consumption, growing internet penetration, rise of online services, digitalization of businesses, and stricter adherence to data localization regulations are expected to spur demand for co-location and edge data centers closer to demand hubs.

-source: hindustantimes.com