GURUGRAM, India, March 6, 2020 /PRNewswire/ -- Apart from the interesting panel discussions and presentations by the doyens from the infrastructure industry, another major attraction at the summit was the release of a joint sectoral report - Transforming the Infrastructure Landscape - Role of Real Estate in Shaping the Road Map for India. Launched jointly by Association of Infrastructure Industry (India) along with Colliers International as the Knowledge Partners, the report highlighted transforming infrastructure landscape in India and the role of real estate in shaping the road map for India.
The infrastructure sector is a key driver of the Indian economy, and critical for driving India's overall development, offering enhanced growth prospects to strengthen India's global competitiveness. "During the next decade India is poised to experience a huge need for private investment and overseas funding in infrastructure as cities become more connected, districts within cities become more accessible and urban-rural connectivity improves. Given the government's thrust on the ease of doing business and ease of living, government's policies need speedier implementation," says Sankey Prasad, Managing Director and Chairman at Colliers International India.
Sharing his views on the role and impact of real estate as part of infrastructure development, Mr. Rajaneesh Dasgupta, Trustee & Director General, Association of Infrastructure Industry (India) pointed out, "The impact of infrastructure has a strong bearing on real estate in terms of land value as well as rental, apart from triggering new trends in real estate. Many new asset classes and investment options are generated in the process, once the value additions accrued from the existing infrastructure and the scope of future infrastructural development are accounted. We are proud to present this report in association with Colliers International. This in-depth sectoral report highlights the role of infrastructure in the development of real estate of the country - not only in urban India, but also how rural India can immensely benefit from the same."
Government thrust on evolving Indian infrastructure
Infrastructure is important for increasing the country's economic growth and the integration of the Indian economy with other economies of the world.
Roads: A major priority
Total Indian investment in road building increased by almost 200% to INR1.59 trillion (USD22.4 billion) in 2018-19 compared to that in 2014-15, and private investment accounts for 14% of that.
Indian Railways: A lifeline of the Indian transport industry
Indian Railways is in need of modernisation to enhance passenger experience. The plans to involve private sector involvement, which will give a boost to infrastructure growth. Indian Railways also aims to increase its freight haulage, in part by developing Dedicated Freight Corridors (DFC). High speed rail corridors will boost connectivity across the country.
Airports: Enhancing the coverage across the country
The government has taken several steps to improve the country's airport infrastructure and proposed a modernization plan to upgrade 35 non-metro airports. FDI inflows in India's air transport sector (including air freight) reached INR128.8 billion (USD1.82 billion) between April 2000 and December 2018. The aviation industry in India is forecasted to see investment of INR350 billion (USD4.94 billion) in the next four years.
Real estate trends defining infrastructure patterns
The real estate sector is evolving with the emergence of alternate asset classes including senior living and student housing along with the growing prominence for mixed-use developments and affordable housing in Tier 2 and Tier 3 cities.
Real estate avenues rising in tier 2 and tier 3 cities
Transit-oriented development is increasingly popular in Tier 1 cities like Delhi and Bengaluru, as well as Tier 2 and 3 cities of Ahmedabad and Bhubaneshwar, and it is expected to enhance along with the overall infrastructure development.
Affordable housing gaining prominence in tier 2 and tier 3 cities
Developers have also been giving increasing attention to the residential market in Tier 2 and Tier 3 cities, on the back of improved infrastructure, which is leading to enhanced connectivity and relatively lower construction costs.
Emergence of alternate asset classes - senior living and student housing
The elderly population in India is growing, with the United Nations Population Fund (UNFPA) projecting that the percentage of Indians over the age of 60 will increase from 8% in 2015 to 19% in 2050. These senior citizens' need for housing presents a huge opportunity for real estate developers.
Mixed-use developments offering greater mobility and convenience
Mixed-use development combines various residential, commercial, retail, industrial, educational and healthcare facilities in one master-planned development. As per Colliers' research, emergence of millennials, who account for about 36% of the India's working population, will probably sustain the demand for integrated live-work-play environment as the concept of building offices, residential, malls, schools and hospitals within one community satisfies the millennials' demand for greater mobility and convenience.
Challenges and probable solutions
While infrastructure development can provide a boost to the economy, the primary step is to identify the issues associated with weak infrastructure in India. Rural road network provide insufficient access to rural areas. Increased road connectivity should promote economic growth while reducing poverty.
Land acquisition also proves to be a hindrance in infrastructure development. Large infrastructure projects in India have also often been stalled on account of environmental concerns.
In order to address key issues and attract foreign and private capital into infrastructure, in recent years, the government plans to resort to innovative financing strategies including credit enhancement fund for infrastructure projects, strengthening the corporate bond market in India, asset monetization, innovative financing of smart cities and other infrastructure projects, etc.
"The government's thrust on infrastructure is very apt. Evolving infrastructure is likely to usher in a transformational change in India in the coming years - in the way people live, travel, work and do business. There are profitable business opportunities for the real estate and allied sectors to contribute to the India story by not only working towards enhancing urban infrastructure but also towards bridging the rural urban gap in infrastructure and connectivity", says Kaveri R Deshmukh, Senior Associate Director, Research, Colliers International and the author of the report.
About Colliers International Group Inc.:
Colliers International (NASDAQ: CIGI) (TSX: CIGI) is a leading real estate professional services and investment management company. With operations in 68 countries, our more than 15,000 enterprising professionals work collaboratively to provide expert advice and services to maximize the value of property for real estate occupiers, owners and investors. For more than 25 years, our experienced leadership, owning approximately 40% of our equity, has delivered compound annual investment returns of almost 20% for shareholders. In 2019, corporate revenues were more than $3.0 billion ($3.5 billion including affiliates), with $33 billion of assets under management in our investment management segment.
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About Association of Infrastructure Industry (India)
Association of Infrastructure Industry (India) is a fledgling national body for stakeholders of the infrastructure industry and aims to represent the concerns, achievements, point-of-view of the industry across all platforms.
As a Trust, Association of Infrastructure Industry (India) seeks to act as nodal and premier body that not only brings together various stakeholders, but also aims to provide quality inputs to both governments as well as industry thereby facilitating inclusive infrastructure growth of the country. It aspires to create platforms that generate concrete executable intelligence as well as conducting research furthering inclusive infrastructure growth in the country.
Association of Infrastructure Industry (India) believes that the infrastructure transformation of India can be achieved only through inclusive approach of- Government, Private Corporations and Citizens of the country and thereby wants to become the voice for all the stakeholders of the industry.
For further information, please contact:
Trustee & Secretary
Association of Infrastructure Industry(India)
Sr. General Manager and Head,
Marketing & Communications
Colliers International India
Phone: +91-9811867682/ +91-8826377335
Email: [email protected]
SOURCE Colliers International India