The future of Indian real estate is going to be distinctively different from the current times with the widespread development of high-rise projects which house an entire ecosystem, integrated with state-of-the-art technology and a high level of sustainability keeping operational costs at a minimum among the evolving changes. These changes will be driven by the growing migration towards cities, necessitating the need for smarter and sustainable buildings to cater to the evolving needs of businesses, individuals and society.
According to Invest India, 25-30 people are migrating to metros and tier-1,2 [1] [2] cities from rural areas every minute in search of better livelihoods and lifestyles. If the pace of migration from rural areas to urban centres continues, the Indian urban population is likely to reach 600 million by 2030.
This will significantly drive demand for commercial, residential, and retail real estate in the business districts across cities. Industry association NAREDCO and property consultant Knight Frank suggest that the size of the Indian real estate sector is estimated to jump more than 12-fold to $5.8 trillion by 2047 from $477 billion last year and will contribute over 15 per cent to the total economic output of the country.
However, this large-scale migration is most likely to increase stress on the infrastructure and therefore, the new developments need to be structurally robust while ensuring the efficient use of natural resources.
Tech To Fast Track Realty Development
To ensure the real estate needs of this migrating population are timely met, there needs to be an acceleration in supply in tandem with the growing demand. This requires the rapid inclusion of technology across the value chain to ensure swifter development of real estate, the residential sector in particular. In 2024 alone, the Indian residential real estate market is expected to witness a surge in sales by 10-15% to over 3 lakh units and is expected to significantly grow by 2030.
This requires extensive use of technology across the design, construction, monitoring, operations, and maintenance of the project. From designing three-dimensional structures for better visualisation of the project, using drones and project management solutions to track its development, and using precast cement to deploying sensors to control and manage the building’s operations, technology will have to become all-encompassing to fast-track projects.
Sustainable real estate need of the hour
According to a CBRE report, buildings account for 40% of greenhouse emissions globally. Sustainability is thus becoming a key consideration for real estate occupiers, developers and investors as governments across the world commit to carbon neutrality. The report ‘Shoring Up Indian Supply Chain’ suggests a rise in the share of Grade A developments, (which are certified to be healthy, highly efficient, and cost-saving green buildings) in overall I&L from 35% to 50% of the stock by 2030. A similar trend has been witnessed by the office segment where a strong supply pipeline and continued investor interest in investment-grade buildings by leading developers and institutional owners in core locations lead to an increase in development completions in 2023. The appetite for investment-grade assets with a perfect blend of technology, wellness and sustainability features would remain strong.
As per estimates, the cost of a sustainably developed real estate project is about 20-30 per cent higher than a traditional project, depending on its size, scale, and amenities being deployed. For instance, incorporating solar-led systems to manage lighting for common areas or sewage treatment plants may contribute to these elevated costs. However, the operational cost of a sustainably developed commercial or residential project becomes negligible after a few years as against a traditional project where it keeps increasing as it ages.
This judicious blend of technology and sustainability is going to become the very fabric of the Indian Real Estate Industry soon while ensuring business continuity in an ever-evolving market. Apart from supporting the industry’s growth, these factors will also open immense opportunities for innovation and will lead to the emergence of new service providers, thereby expanding the size of the industry. However, this would require major investments from the industry in the next few years to develop cost-effective solutions which can be implemented across the board and will help build trust with ecosystem partners.