Maharashtra, UP & Gujarat together attract 52% of pvt realty investments

Maharashtra, Uttar Pradesh and Gujarat together account for over half of the total investments worth over Rs 12 lakh crore attracted by real estate sector from private investors (including both domestic and foreign), noted a recent study by apex industry body ASSOCHAM.“UP has managed to increase its share in investments made by private players in real estate sector from 0.1 per cent in financial year (FY) 2004-05 to 16 per cent in FY 2014-15 while share of private investors in investments attracted by realty sector in Gujarat has increased by about 10 per cent during the last decade,” highlighted the study titled ‘Real estate investment: State-level analysis,’ conducted by The Associated Chambers of Commerce and Industry of India (ASSOCHAM).However, share of Maharashtra in this regard has decreased from 25.5 per cent in FY 2004-05 to 22 per cent in FY 2014-15.Within the state, private players accounted for over 98 per cent of the total investments attracted by real estate sector in UP, 92 per cent in Gujarat and 89.5 per cent in Maharashtra.

Of the total investments worth over Rs 14 lakh crore attracted by real estate sector across India as of FY 2014-15, private and public investors accounted for a share of about 85 per cent and 15 per cent respectively, highlighted the study prepared by the ASSOCHAM Economic Research Bureau (AERB).

“Improving macro-economic conditions, enabling policy environment, recovering demand, attractive valuations and increasing capital requirements of the real estate sector have lured the private players over the years,” said Mr D.S. Rawat, secretary general of ASSOCHAM while releasing the findings of the chamber’s study.

“With the union government liberalising foreign direct investment (FDI) rules in realty and construction sector, we are hopeful that it will lift the affordable housing space, revive steel, cement and other related sectors, rev up employment scenario and boost the GDP (gross domestic product) growth,” said Mr Rawat.

Karnataka alone attracted over 38 per cent of the total real estate investments made by public sector across India followed by Maharashtra (14.5 per cent) and Gujarat (seven per cent).

Besides, within a state public sector accounted for highest share of 99 per cent in total investments attracted by realty sector in Jammu and Kashmir.

Kerala has clocked the highest compounded annual growth rate (CAGR) of about 59 per cent during the period of almost a decade (b/w 2005-06 and 2014-15) followed by Karnataka (40 per cent), UP (32 per cent), Rajasthan (29 per cent) and Gujarat (28 per cent).

While growth in realty investments in Haryana has dipped by over five per cent, West Bengal (four per cent) and Madhya Pradesh
(three per cent).

Over 75 per cent of the total real estate projects in India remained non-starter as of FY 2014-15, while a whopping 99 per cent of real estate projects in Andhra Pradesh remained non-starter followed by Punjab (96 per cent), Kerala (93 per cent), Haryana (92 per cent) and UP (86 per cent).

Of the total 3,540 live investment projects in India’s real estate sector as of FY 2014-15, over 2,300 projects have remained non-starter and out of these over 1,000 projects have recorded significant delays at an average of 33 months, highlighted the ASSOCHAM study.

Real estate projects stuck in Andhra Pradesh are facing maximum delay of about 45 months followed by Madhya Pradesh (41 months), Telangana (40 months), Punjab and Gujarat (38 months).

In its study, ASSOCHAM has suggested various measures to support real estate sector in India – passage of Real Estate Bill on priority basis thereby safeguarding consumers’ interest; introduction of a single-window clearance system for all real estate projects by central and state governments; completing land records process and make it computerised and accord industry status to real estate sector.

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