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Uttar Pradesh has clocked 106% growth in total outstanding investments attracted by the real estate sector between 2008-09 and 2012-13.
This is stupendous achievement considering outstanding investments in realty had risen by only 25% on pan-India basis during the period, according to a sector specific analysis by Associated Chambers of Commerce and Industry of India (Assocham).
“UP ranks sixth with a share of over 9% in total outstanding investments worth over Rs 14 lakh crore attracted by realty across India until March 2013,” Assocham secretary general D S Rawat said releasing the analysis.
Although UP had attracted outstanding investments worth Rs 1.3 lakh crore as of March 2013, the state also registered a significant decline of 69% vis-à-vis new investment commitments between 2011-12 and 2012-13.
UP ranked fifth with a share of 6% in total value of new investment commitments worth over Rs 42,000 crore made by domestic and foreign private sources in the real estate sector during the last fiscal.
The state had attracted new investment commitments in the real estate sector worth over Rs 8,200 crore in 2011-12. UP failed to improve its performance as new investment commitments in real estate sector in 2012-13 declined to just about Rs 2,600 crore.
While most states witnessed drop of over 50% in attracting new investment commitments in realty during 2012-13, only Gujarat (700%), Kerala (550%), Uttarakhand (400%) and Rajasthan (175%) were few states that saw massive growth in new investments.
Gujarat also had the highest share of 41% in new investment commitments during the last fiscal. Besides, Maharashtra (17%), Karnataka (10%), Tamil Nadu (8%) and UP (6%) were amid top 5 states with maximum share in new investment commitments.
Realty sector accounts for over 11% share in total outstanding investments, both public and private, worth over Rs 122 lakh crore attracted by different sectors.
The domestic real estate sector has been plagued with problems liked dwindling sales, rising construction costs, dampened market sentiment overall, sluggish economic growth, high interest rates, high inflation and poor industrial production (IIP) due to which leading players in the sector had to sell their land to reduce debt, private equity players have trimmed exposure in realty and general slowdown has hit commercial real estate.
However, certain positive developments like Parliament’s approval to foreign direct investment in multi-brand retail would help attract foreign investments and give a fillip to the retail industry and simultaneously boost the demand for commercial real estate in India.
