Real Estate Investments In India On A High In 2023 Expect Momentum To Continue For 2024

The Indian real estate market experienced a significant surge this year, with housing sales reaching record heights in the first nine months of 2023, according to a recent report by ANAROCK research.

Exemplifying the highs in 2023, Godrej Properties, the real estate development arm of the Godrej Group, achieved remarkable success with its project, Godrej Aristocrat, located in Sector 49 on Golf Course Extension Road, Gurugram.

The company recorded sales exceeding Rs 2,600 crore, marking this launch as its most successful in terms of sales value; the achievement surpasses the previous record of over Rs 2,000 crore set by the Godrej Tropical Isle project in Noida last quarter.

Situated on the well-established Golf Course Extension Road in Gurugram, Godrej Aristocrat benefits from its proximity to high-quality social infrastructure and established commercial establishments on Golf Course Road, Golf Course Extension Road, and Sohna Road.

Expressing the significance of Gurugram as a crucial market for Godrej Properties, Gaurav Pandey, MD & CEO, stated, “We hope to launch four new projects in Gurugram in 2024 and will endeavor to create outstanding residential communities that deliver long-term value for residents.”

Godrej Properties has strategically expanded its presence in and around the National Capital Region (NCR) post the COVID-19 pandemic. Among its acquisitions is approximately 62 acres of land in Kurukshetra, Haryana, earmarked for developing 1.4 million sq ft of plotted residential development.

Additionally, the company secured two land parcels through an auction for a residential project in Noida, involving an investment of Rs 377 crore.

The move is in tandem with Godrej Properties’ aim of aggressive expansion within the NCR, aligning with its broader growth strategy in the real estate sector.

Meanwhile, Experion Developers, the Indian arm of Singapore’s Experion Holdings, is strategically planning to introduce projects with a sales potential exceeding ₹10,000 crore in the upcoming year.

CEO Nagaraju Routhu revealed that the company has successfully completed land acquisitions valued at ₹2,100 crore, and it aims to leverage these acquisitions for future developments.

The company’s ambitious plan involves launching projects on all five recently acquired land parcels, coupled with additional land acquisitions in the National Capital Region (NCR) and other cities.

Routhu expressed confidence in exceeding ₹1,000 crore in revenue for FY 24, with expectations of more than doubling this figure in the subsequent year. Notably, the company remains debt-free, funding all acquisitions through internal accruals.

Among the notable acquisitions are a 4-acre plot on Golf Course Road in Gurgaon (₹400 crore), a 5-acre parcel in Noida’s sector 45 (₹250 crore), a 5.5-acre parcel in Gurgaon’s sector 48 (₹550 crore), a 6-acre land parcel in Gurgaon’s sector 53 (₹450 crore), and a commercial land parcel on Golf Course Extension Road acquired through insolvency proceedings (₹450 crore).

Routhu outlined the company’s cautious financial approach, stating that although they possess a robust cash flow, both equity and debt avenues are available for construction if required. However, the company is committed to avoiding undue risks to its balance sheet.

The company’s diversified portfolio includes land parcels in Amritsar, Goa, and Panipat, earmarked for future development. Routhu disclosed plans to launch four projects, with one in Noida and three in Gurugram, emphasizing a multi-pronged strategy to cater to distinct demands and opportunities in various locations.

Experion Developers is actively engaged in constructing townships, group-housing projects, commercial landmarks, organized retail destinations, hotels, and resorts across multiple states, including Andhra Pradesh, Delhi-NCR, Goa, Haryana, Maharashtra, Punjab, Tamil Nadu, and Uttar Pradesh.

The Outlook For 2024
Looking ahead to FY24, Routhu anticipates substantial growth driven by the introduction of new projects into the market. While precise figures remain challenging due to market uncertainties, the company expects a significant expansion in the top line.

The positive outlook hinges on market drivers and the company’s commitment to innovation and meeting evolving customer demands.

The Indian real estate market has experienced a significant surge this year, with housing sales reaching record heights in the first nine months of 2023, according to a recent report by ANAROCK research.

The sales figures surpassed the entire value of 2022 within this period and are expected to further increase when the final data for 2023 is released. Cities such as Mumbai MR, Delhi NCR, Pune, Bengaluru, Chennai, Hyderabad, and Kolkata have witnessed unprecedented sales of residential real estate properties.

This booming trend has also extended to smaller cities and towns across India, making real estate an attractive long-term investment option deemed safe by investment experts.

ANAROCK’s report indicates a promising future for the real estate sector in India, projecting a Compound Annual Growth Rate (CAGR) of 9.2% from 2023 to 2028.

Experts attribute this positive trajectory to continued urbanization, growth in the rental market, and a steady appreciation in property prices.

The JLL Home Purchase Affordability Index suggests that residential real estate is poised to remain within affordable limits, reaching a three-year high in 2024.

The expected repo rate cut, ranging between 60-80 bps, is anticipated to keep home prices within a reasonable range for buyers, with metro cities like Mumbai NR, Delhi NCR, Chennai, and others leading the surge.

Despite global economic uncertainty, many experts believe that investors may turn towards safer, long-term bets such as real estate.

Gunjan Goel, Director of Goel Ganga Developments, emphasizes the importance of resilience and adaptation for successful real estate investors in the face of economic uncertainty.

Diversifying portfolios, actively monitoring global events, and making data-driven decisions are considered critical strategies to manage market volatility.

LC Mittal, Director of Motia Group, highlights the major transition spurred by technology in the real estate sector in 2024 with technological advancements, including virtual property tours, blockchain transactions, and other innovations, transforming how real estate is purchased, sold, and managed.

Mittal believes that investors embracing these changes will gain a significant competitive advantage.

Meanwhile, Aman Gupta, Director of RPS Group, advocates for the green development of real estate, considering sustainability as an essential component of investment in 2024.

The green revolution, focusing on environmentally-friendly developments, is increasingly appealing to investors, not only for ethical reasons but also as a wise financial option.

Piyush Gupta, Managing Director of Capital Markets & Investment Services at Colliers India, places his bets on Real Estate Investment Trusts (REITs).

He notes the remarkable performance across various real asset sectors in 2023 and emphasizes the positive investment climate.
Gupta highlights India’s strengthening position in emerging markets, with a growing economy and consistent investor-friendly policy framework attracting global capital.

The consensus among experts is that real estate investment is poised to flourish in 2024, with stable interest rates providing further impetus to the sector as India aims for a growth rate exceeding seven per cent in the current financial year.

The Last Bit, the Indian real estate sector stands at the cusp of a remarkable journey in 2024; the stellar performance in 2023, marked by record-breaking sales and robust growth, sets the stage for a promising future.

As the market embraces technological advancements, sustainable practices, and innovative investment avenues like Real Estate Investment Trusts (REITs), investors have ample opportunities to capitalize on this renaissance.

Despite global economic uncertainties, the resilience of the real estate market, coupled with a conducive policy environment, positions it as a lucrative opportunity for investors seeking stability and long-term returns.

As India aims for significant economic growth, the year 2024 is expected to be positive for Indian real estate.