IT Boom Creates Space Shortage in India

We firmly stand behind our contention that areas such as real estate, business continuity and outsourcing are strongly connected. India's certainly booming, but as the boom continues, pressure is exerted on the real estate sector. Specifically, with so much new demand and a supply that can't be instantly adjusted, supply shortages seem inevitable as demonstrated in this article in India's Economic Times:

Real estate consultants say that currently, India adds approximately 8-9 million sq ft of space, which can at best be increased to 11-12 m sq ft a year on a pan-India basis. Even if 80% of this supply is made available for the IT/ITeS sector, it falls way short of the projected demand of 20 m sq ft of real estate.

Imbedded within any problem, however, is an opportunity, and in this case, it seems clear that the doors seem wide open for foreign investment:

“Where this funding will come from is another worry,” says Balaji Rao, director, TCG Urban Infrastructure, suggesting that the opening up of foreign direct investment (FDI) for software parks and commercial complexes in India and capital market reform for real estate need could be important measures for the government to address at this stage.

Just one more thing to chew on when we turn our sights from regional to global.