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Boom Time for Commercial Property in India

One Bedroom Apartment in Mumbai

Rapidly rising incomes and the growing propensity of Indians to spend is fueling the boom in organised commercial property in India.

Commericial project in Noida, India

As the population having disposable income is likely to treble from 2007-08 to 2009-10, there will be a boom in the number of commercial property in India. It is estimated that according to current projections, an investment of Rs 1200 crore to Rs 2000 crore will be made annually on commercial real estate and supporting infrastructure.

According to a latest report on the commercial property in emerging markets brought out by various real estate companies in different cities like Delhi, Gurgaon, Noida, Mumbai, over 300 large malls, IT parks and other commercial space will come up in India. These will mainly cater to the aspirations of the fast-growing middle class.

The report adds that the ‘consuming class’ (with an income of more than Rs 45,000) and ‘climber class’ (with an income between Rs 30,000 and Rs 45,000) were the two segments that offered tremendous opportunities to retailers. The number of households in these categories combined is expected to grow by 38.8 percent from 124 million in 1994-95 to 159 million by 2008-09. This increase in the consuming class in the country will lead to greatly increased purchasing power.

Consumer spending is estimated to have grown at an average rate of 12.2 percent per annum over the last couple of years. The average Indian spent Rs 15,396 in 2004-05. This report says that a review of urban consumer spending which reflects that expenditure on lifestyle items such as vacation and eating out increased while savings and investments declined.

The analysis also suggested that groceries were the single largest expense, accounting for nearly 42 percent of total expenditure. Eating out was the next biggest item, accounting for 12 percent.

Rapid advances witnessed by India in areas like education, communication, information technology, travel and transportation have created a sense of freedom in the minds of people. These advances, have led to a paradigm shift in the way Indian consumers behave. Consumers today seek convenience at their doorstep for regular purchase but are willing to travel to exclusive destinations for valuable items. The report suggested that with Indian consumers maturing to self-service formats, reliance on salesmen was on the decline.

So, if you are looking for investment in the commercial property of India, this is the right time to invest where you can getting the big capital appreciation with excellent rental income.

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