Outlook for 2025
Technology Advancements Driving Growth:
The future of real estate is intertwined with tech innovation. Building Management Systems are expected to incorporate Gen-AI technologies, while IoT and home automation are reshaping customer experiences in residential properties. In infrastructure, the adoption of Global Navigation Satellite Systems (GNSS) and Automatic Number Plate Recognition (ANPR) for toll collection will streamline processes. Investments in data centers, driven by local data storage policies, will also boost real estate technology.
Regulatory Enhancements:
Early adoption of the VCC framework could make Indian real estate competitive globally. The DESH legislation is anticipated to provide tax benefits, including concessional corporate tax rates of 15% for greenfield and brownfield units, further driving growth in the sector.
Expanding Focus on Tier I and II Cities:
Indian real estate businesses are increasingly targeting redevelopment projects in Tier I and II cities, which offer immense growth opportunities. These cities will play a key role in shaping the future of real estate.
Aviation and Tourism Opportunities:
Growth in aviation is expected to boost Maintenance, Repair, and Overhaul (MRO) services, along with cruise tourism, supported by port development initiatives. These sectors could also impact commercial real estate dynamics.
Shipping and Coastal Opportunities:
Coastal shipping, a cost-effective alternative, is gaining traction. Increased trade volumes call for self-reliance in container manufacturing. Shipbuilding and container production could benefit from incentives and infrastructure status for the sector.
Affordable Housing Tax Reforms:
Investment-linked capex deductions currently focus on slum redevelopment and affordable housing projects, which have limited investment requirements. Reintroducing tax holidays and increasing budgetary support for affordable housing tax initiatives would significantly bolster the sector.
REIT Taxation Simplifications:
Hybrid taxation for REITs complicates investments. Ensuring pass-through taxation for all income, including capital gains, would encourage investor participation.
Indian real estate, underpinned by technology advancements, is poised to grow at 13-15% over the next five years, outpacing many other sectors. By 2047, it is projected to reach $4.8 trillion, contributing 18% of GDP. Collaboration with technology innovation will drive sustainable development, lower costs, and enhance infrastructure quality while improving customer experiences across residential properties and commercial real estate ventures.