Mantri EleganceReal estate sector in the country will witness a prolonged and robust demand. According to a report by global realty consultation firm Cushman & Wakefield, the pan-India residential demand for 2009-2013 could be around 7.5 million units and that for office space at 196 million sq ft.

The Cushman & Wakefield India Real Estate Investment report 2009 Survival to Revival Indian realty sector on the path to recovery estimates demand for retail space at around 43 million sq ft while the hospitality sector is expected to see a demand of approximately 6,90,000 room-nights in the same period.

According to Anurag Mathur, MD of C&W , India, Though the highgrowth trajectory of the previous years saw a setback during the global economic slowdown, the inherent strong economic fundamentals, low exposure to debt and state intervention , would help the sector gradually return to the path of recovery and witness robust demand for real estate across sectors.

The pan-India residential demand is estimated to be over 7.5 million units by 2013, across all housing categories , of which 85% is expected in the mid-segment and aff o r d a b l e housing segment , the report says. Of the total demand exp e c t e d across India, 60%, equivalent to 45 lakh units, would be generated in top 7 cities (see chart). Mumbai is expected to witness the highest cumulative demand of 16 lakh units by 2013, followed by the National Capital Region, which is expected to see a demand of 10.20 lakh units in the same period. That means, on an average, every year there will be a demand of two lakh units. This is far more than the expected supply in the area.
According to the report, the demand for housing units will keep on rising year after year. The total demand for the housing units in all the seven cities will rise from 11.96 lakh units in 2009 to 13.32 lakh units in 2010, and to 14.86 lakh units in 2011. The figure will further rise to 16.63 lakh units in 2012 and to 18.64 lakh in 2013. Bangalore and Hyderabad are expected to see the highest compounded annual growth rate of 14%.

Total office space demand is expected to be 196 million sq ft during 2009-13 , of which approximately 42% is expected to be generated in the seven cities.

According to the C&W report, though office market is expected to witness a fall in demand in 2009 with an expected absorption of 27 million sq ft, the period from 2010 onwards will see the markets experience a healthier demand with a compounded annual growth of 19% from 2009-2013 . The commercial office market in India is likely to head towards a more balanced demand and supply situation in the next few years. The highest demand in the next five years is expected to be in Bangalore at 34 million sq ft followed by Chennai at 27 million sq ft. This increase in demand is largely due to improving economic conditions, positive market sentiments and growing corporate confidence.

Retail in BangaloreRetail sector is expected to see a demand of approximately 43 million sq ft, mostly concentrated in the seven cities. Bangalore would see the highest demand of approximately 6.8 million sq ft however, Pune is expected to record the highest compounded annual growth of 51% for the next five years. The demand for the hospitality sector is expected to see a surge and is expected to be approximately 6,90,000 room-nights between 2009-2013 .

NCR and Mumbai are expected to see the highest demand due to the higher volume of business travellers to these cities. Approximately 35% or 2,42,000 room-nights of the pan-India demand for hospitality is expected to be generated in the top three cities owing to various initiatives taken by the Indian government to promote commercial and tourism activity in these locations.

Mathur says, While the upcoming 2010 Commonwealth Games have been the key demand driver for hospitality segment in NCR, the significant expected rise in office demand in the peripheral locations is also likely to play a role is boosting room-night demand . Factors like increase in urbanization, income growth, relatively high disposable incomes are likely to positively impact retail as well as residential demand in the city.

NCR is expected to see the highest demand in the hospitality sector, owing to its growing importance as commercial and political centre. The maximum surge for demand in hospitality is expected to be witnessed in 2010 during the Commonwealth Games. The retail demand is expected to be 66.6 million sq ft by 2013 and the residential demand in the same period is expected to be approximately 10.20 lakh units. The office space demand on the other hand is expected to be approximately 25 million sq ft.