The real estate industry in India has mirrored India’s economic boom and prosperity. The size of the Indian real estate industry is estimated to be at approximately USD 12 billion, growing at a rate of 30% annually. It is expected to grow to USD 50 billion by 2010 and to USD 90 billion by 2015. Real estate services, housing, and construction sector contributes an estimated 14% to India’s GDP, making it a prominent economic activity.
The real estate sector in India has lacked credibility and transparency, and has been fraught with restrictive rules and regulations, which in turn have proliferated unstructured transactions. Post March 2005, it got a shot in the arm with the government allowing foreign direct investment. Since then, these rules have been further relaxed to warrant interest from both equity and debt players. A new crop of professionals representing the interest of domestic and international developers and investors have emerged, leading to a demand for transparency and better access to information, allowing for more structured financing decisions.
As one of the sponsors of the event, Shyam Reddy of Indu Projects pointed out, “Real estate as an asset class suffers from lack of respect and credibility when compared to other asset classes such as stocks and bonds, and this may be due to the vast difference in quantity and quality of data available.” This was reiterated by Ganesh Raj, partner E&Y, who pointed out the need for the industry to be closely involved in formulating what needs to be researched and how this should be taken forward.
Land management and assembly is currently one of the hottest topics of debate.

In the era of acute shortage of quality serviced land, as well as requirement of large parcels for SEZ, efficient and affordable delivery of this basic raw material has become paramount to the success of any project. Land delivery has traditionally been bogged down by a multitude of laws, which change from city to city and state to state, lack of clear titles, difficult interpretation of zoning and conversion laws, and laws such as Urban Land Ceiling and Regulations Act. Information rests in the hands of few local players who modulate the system to the detriment of the wider investor and developer community. Organised investors shy away from investing in areas where the outcome of the development process is unclear.
Research that addresses the impact of laws, and how these are likely to contribute to the ease of assembly and delivery mechanisms would go a long way in helping the government streamline the development process. A central board would help streamline the process based on preset guidelines and process. The guidelines would be based on the domestic and international benchmarks and their validity for India. This could be a major area of research for institutions. Research would also be able to review the key macro economic factors that impact the industry and how the variation in these factors is likely to steer the course and demand and supply trends of various asset classes.
Raising capital for real estate has traditionally been an all equity game, with developers accessing family and social networks as equity partners. This has created a lack of flexibility and transparency in the system, with information largely relegated to the hands of few players at a regional level.