Indian Realty Poised For Decent Growth This Year

In 2025, the Indian real estate sector will likely enter a transformative journey, driven by strengthened market sentiments, high demand, and new supply across key segments. The industry is projected to expand to $5.8 trillion by 2047, increasing its GDP contribution from 7.3 per cent to 15.5 per cent. This year, the sector is expected to be a landmark year, marked by record-breaking retail and office leases, a decade-high in residential sales and launches, and soaring consumer confidence in the sector. As the economy continues its steady recovery and urbanisation accelerates, the realty market is poised to witness substantial growth in residential, commercial, and retail domains.

The growth is influenced by several factors like a revitalised economy, navigated by steady GDP growth and increased foreign investments, mega infrastructure projects like expressways, metro expansions, and more enhancing connectivity across urban and sub-urban regions. Together, these growth drivers are setting the stage for a strong realty market, creating opportunities for developers to innovate and for investors to capitalise on emerging trends.

The housing market showed strong fundamentals and a consistent demand for residential properties. As per CBRE's report, the premium and luxury housing segments experienced a rise in demand, with their collective share of the overall residential demand increasing from 6 per cent in 2019 to 16 per cent in the first nine months of 2024.

Further, in the commercial segment, the office segment has seen transactions involving nearly 53.7 million square feet of space in the January-September period of 2024, a 27 per cent increase over the same period last year, as recorded by Knight Frank. This growth is primarily driven by GCC and India-facing businesses, which are seeking modern office spaces to accommodate their expanding operations. Demand is further enhanced by flexible work arrangements that require adaptable and innovative workspace solutions.

Additionally, retail real estate is gaining prominence for its accessibility and charm. As per JLL, the top seven Indian cities will add over 45 million sq ft of retail real estate through 88 new developments. This anticipated growth will outstrip the retail space supply from the past decade (2014-2023), which totaled around 38 million sq ft. The projected retail developments will be larger compared to those that became operational in the last decade. This signifies a notable trend in the retail market moving towards larger-sized experience-led developments. Besides, the total expected addition of retail space,

In 2025, developers should prioritise delivering high-quality, sustainable projects with timely completion, incorporating eco-friendly designs, energy-efficient features, and smart technologies to appeal to today's environmentally conscious buyers. Mixed-use developments will be particularly attractive, offering diversified spaces that blend residential, commercial, and retail elements. Hence, this year promises to offer a wealth of opportunities across residential, commercial, and retail markets, with emerging trends shaping the future of the industry. Developers, investors, and end-users have a chance to capitalise on the evolving dynamics and align themselves with growth hotspots, sustainable developments, and high-return investment opportunities.

Similarly, industrial & warehousing demand will also remain healthy, buoyed particularly by occupiers from Third Party Logistics (3PL) and engineering segments. These segments are likely to cumulatively account for the bulk of the warehousing demand across the five major cities of the country.