India Property Industry Report - H1, 2013

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India Property Industry Report - H1, 2013

Real estate sector has been one of the key drivers of Indian economic growth during the last decade. The housing sector of India ranks fourth in terms of multiplier effect on the economy. However in last few quarters, persistent inflation and high interest rates caused a dent in the growth of this sector. Affordability is a major concern for middle class Indians and a steady rise in housing prices together with high interest rates and inflation has neither helped their cause, nor has it benefited the real estate sector. As a result, experts are predicting a price correction in the housing sector of the country.

The sector showed some signs of recovery in the second half of 2012 with growth in number of transactions as well as improvement in absorption rates. However, the pessimistic growth and inflation figures witnessed in early 2013 again brought a slump in the market. A price correction took place in the commercial lease and rental segments of major cities. The slowdown in economic growth and vacant office spaces acted as catalysts in lowering rental prices of commercial properties in major hubs of the country. Residential prices, though, showed resilience and registered growth. The housing transaction volume index declined in the first three months; grew briskly in the next six and remained flat in the last three months in 2013. After a subdued first half of 2012, the index rose in the second half of 2012. BSE Reality Index, which represents the largest companies in the sector, rose in the second half of 2012 but witnessed a sharp decline in the first half of 2013.

The near term outlook for Indian property is negative because of low absorption, high interest rates and high inflation. Most of the leading real estate players are suffering from high debt levels and low profitability. However, looking at long term, the large supply/demand gap in the residential market and rising per capita income of Indians, along with increasing urbanization bodes well for this sector.

Key Points:

• In a report published by the Ministry of Housing and Urban Poverty Alleviation, it was estimated that at the start of 12th five year plan (2012-2017) the total urban housing shortage in the country was around 18.78mn.

• According to Economic Survey of India 2012-2013, the real estate sector accounted for around 10.8% of GDP as of FY12. The housing sector ranked fourth in terms of multiplier effect on the economy. During the period 2008-2012, the sector grew at a CAGR of 11%.

• Between January 2000 and March 2013, real estate and construction development sector witnessed a cumulative FDI of USD 22bn. The sector accounted for 11% of the total cumulative FDI received during this period.

• The combined market capitalization of the companies listed on the BSE realty index was around USD 10bn as of August 20, 2013. After a subdued first half of 2012, the index rose in the second half of 2012. However, it again witnessed a sharp decline in the first half of 2013.


Table of Contents

1. Industry Profile
1.1 Sector overview
1.2 Sector size
1.3 Competitive landscape
1.4 Environmental scanning
1.5 Recent developments in the industry

2. Market Trends and Outlook
2.1 Key economic indicators-India
2.2 Trends in housing
2.3 Commercial property trends
2.4 Retail space
2.5 Special economic zones
2.6 Hospitality space
2.7 Construction cost

3. Leading Players and Comparative Matrix
3.1 Leading Players
3.1.1 DLF Limited
3.1.2 Oberoi Realty Limited
3.1.3 Sobha Developers Limited
3.2 Comparative matrix
3.3 SWOT analysis

4. Tables & Charts

Table 1: Housing statistics-Country wise
Table 2: Office rental: Major cities worldwide
Table 3: DLF controversy
Table 4: Key elements of the proposed real estate regulatory authorities
Table 5: RBI house price index for nine major cities of India
Table 6: RBI housing transaction index for nine major cities of India
Table 7: Top 20 commercial hubs of India by monthly property rental
Table 8: Top 10 commercial hubs of India in terms of growth
Table 9: Major commercial hubs of India in terms of decline
Table 10: India investment plans of global retail majors
Table 11: Number of approved hotels and room inventory
Table 12: Balance sheet parameters
Table 13: Valuation matrix

Chart 1: Y/Y change in house price index
Chart 2: Vacant office space-Overall
Chart 3: Size of Indian real estate sector
Chart 4: Monthly average closing price of BSE Realty Index
Chart 5: Annual FDI in the real estate sector
Chart 6: Position of constituent parties in lower house of parliament
Chart 7: Current account deficit and fiscal deficit
Chart 8: Per capita income- India
Chart 9: HUDCO- Number of dwelling units for economically weaker section
Chart 10: Quarterly GDP Growth Rate
Chart 11: Average Monthly USD to INR Exchange Rate
Chart 12: Inflation during FY13-India
Chart 13: Repo rate
Chart 14: GDP by Sector
Chart 15: Percentage change over previous year- GDP by Sector
Chart 16: Urban housing shortage in India by income group
Chart 17: Components of urban housing shortage in India
Chart 18: RBI housing price index- All India
Chart 19: RBI house transactions volume index- All India
Chart 20: Distribution of dwellings approved by HUDCO by states
Chart 21: Distribution of loan approval by HUDCO by states
Chart 22: Retail mall space added in India
Chart 23: State wise distribution of approved SEZs
Chart 24: Sector wise distribution of approved SEZs
Chart 25: Cumulative FDI in hotel and tourism sector
Chart 26: Y/Y change in construction cost index
Chart 27: Y/Y change in cost index
Chart 28: Annual operational performance of DLF
Chart 29: Net sales of DLF-Annual
Chart 30: Profit margins of DLF
Chart 31: Oberoi Realty Limited- Shareholding
Chart 32: Segment wise revenue break up of Oberoi Realty
Chart 33: Net sales of Oberoi Realty-Annual
Chart 34: Profit margins of Oberoi Realty
Chart 35: Sobha Developers Limited- Shareholding
Chart 36: Segment wise revenue break up of Sobha Developers
Chart 37: Net sales of Sobha Developers-Annual
Chart 38: Profit margins of Sobha Developers

Number of pages: 34
Release Date: Fri, 30 Aug 2013