Today, the Indian real estate sector is one of the fastest growing markets in the world. It has four sub-sectors- housing, retail, hospitality, and commercial. While housing contributes to five–six percent of India's gross domestic product (GDP), the remaining three sub-sectors are also increasing at a fast pace.
Real estate in India is being recognized as an infrastructure service that is driving the economic growth engine of the country. Growing infrastructure requirement in diverse sectors such as tourism, education, healthcare, etc., are offering several investment opportunities for both domestic as well as foreign investors..
Total investment by private equity (PE) funds in the real estate sector from January–March 2014 was approximately Rs 28 billion (US$ 465.19 million). This is a substantial increase of 28 per cent compared to the previous quarter and close to 2.5 times the investments during January–March 2013.
The role of the Government of India has been instrumental in the development of the sector. With the government trying to introduce developer and buyer friendly policies, the outlook for the real estate sector in 2014 does look promising.
The market size of the Indian real estate sector stood at US$ 55.6 billion in 2010–11 and is expected to touch US$ 180 billion by 2020. In fact, the demand is expected to grow at a compound annual growth rate (CAGR) of 19 per cent in the period 2010–2014, with Tier I metropolitan cities expected to account for about 40 per cent of this growth.
The net office space absorption across the top eight cities – Delhi-NCR, Mumbai, Bengaluru, Chennai, Hyderabad, Pune, Kolkata and Ahmedabad – was up 58 per cent during January–March 2014 as compared to the corresponding period last year, according to real estate consultancy Cushman & Wakefield. Among the eight cities, Ahmedabad and Delhi-NCR recorded a threefold increase in net absorption during the period over January–March 2013.
The up-coming budget is likely to bring in policies as to uplift the market sentiment in 2014, which include a) make provision for special residential zone, b) increase infrastructure allocation and c) provide real estate with industrial status.
SAM & Real Estate
Sam proposes real estate funding assistance to prominent builders with land bank, clear title and market solidarity. SAM has been instrumental in bringing up major real estate across India which includes but is not limited to groups majors like the Sahara and minors like AIMS, Kashipur serving both alike. It has helped many NGOs like the Sewa Mandir to achieve their developmental goal.
SAM & SE
SAM Consultant, [analytic wing of Shuvam Enterprises, an AA+ rated finance agency of USA is serving India since 2006. Based in London, the Indian wing mainly involved in business management, SAM looks after the management of the finances of a business / organization in order to achieve financial objectives.
The Key Aspects Of Financial Decision-Making Relate To Investment, Financing And Dividends:
Investments must be financed in some way – however there are always financing alternatives that can be considered. For example it is possible to raise finance from selling new shares, borrowing from banks or taking credit from suppliers
A key financing decision is whether profits earned by the business should be retained rather than distributed to shareholders via dividends. If dividends are too high, the business may be starved of funding to reinvest in growing revenues and profits further.