According to a report by the Confederation of Indian Industry (CII) and real estate consultancy Knight Frank, India’s real estate sector is expected to grow three-fold from $482 billion to $1.5 trillion by 2034, due to growing demand for residential and commercial properties. The sector’s share in the country’s economic output is also predicted to rise from 7.3% to 10.5% over the next decade. The report highlights that the country’s GDP could potentially reach $10.3 trillion by 2034 if favourable conditions for drivers such as a growing young population, manufacturing, infrastructure, and urban expansion are met.

The report also states that the residential property demand in India is increasing, along with the need for office space, and the expanding hospitality and retail industry. Additionally, expanding e-commerce is pushing the demand for warehousing and storage facilities in India, which is providing a boost to the industry.

The residential market is expected to be worth $906 billion by 2034, while the office sector is expected to be worth $125 billion. The report estimates that an additional 78 million housing units will be needed in the next 10 years to meet the requirements of the population, with 42.5% of Indians predicted to be living in urban centres.

The report also suggests that a large number of the population will be in the lower middle and upper middle-income bracket, and will need affordable housing as they transition towards the mid-segment. The share of high-net-worth and ultra-high-net-worth individual households is expected to rise from 3% to 9% by 2034, which will drive significant demand for luxury housing.

In terms of commercial real estate, an additional 1.7 billion sq ft of office space will be required by 2034 to accommodate economic activity and the growth of the formal economy. According to the report, substantial growth will be driven by global capability centres (GCC). The report also estimates that by 2030, there will be an estimated 2,400 GCCs across India as the country emerges as a global technology and services hub.

Finally, the report predicts that private equity (PE) in real estate will substantially increase, from around $3.1 billion in 2023 to $14.9 billion by 2034. The report suggests that emerging sectors such as data centres, healthcare, hospitality, co-living, and co-working spaces present promising avenues for private equity investors, driving the growth narrative in India for the coming years.