Fuelled by the impressive economic growth, the country’s real estate market which is growing at 30 per cent, is likely to touch 90 billion dollar by 2015, a recent report projects.

Though the growth of the realty sector came down in recent times, it would touch the 90 billion dollar from the current level of 14 billion dollars and would help the economy continue to grow between 9-10 per cent, according to a recent report by industry body, Assocham.

“While 10 billion dollar FDI is expected to flow to the sector by 2008, it might reach 15 billion dollars by 2010,” Assocham President Venugopal N Dhoot said in a statement.

The additional requirement of 370 million sq ft of space in urban areas by 2010 by IT, ITeS, financial services and organised retail alone has still made the real estate most lucrative sector, providing returns ranging from 20 to 30 per cent, the report said.

Repealing the Urban Land (Ceiling and Regulation) Act 1976, rescind of the Rent Control Act and increasing floor-area-ratio would give further boost to the sector, Dhoot added.

According to the chamber report, IT and ITeS, banking and financial services have in particular created a huge demand for office space.

IT and ITeS alone is expected to require 150 million sq ft across urban India by 2010, while services are further expected to clock a double-digit growth in the future, keeping the demand of office space robust.

As per the report, analysts pegged the total demand for commercial office real estate in Bangalore, Chennai, Delhi-NCR, Mumbai, Pune, Hyderabad and Kolkata alone to be over 25 million sq ft in 2006.

The year 2006-07 witnessed organised retail growing at a pace of 25-30 per cent, experiencing a capital appreciation to an extent of 25-35 per cent.

According to the estimates, organised retail in India has a potential to add a business of about 48 billion dollars by 2010. This is likely to create a demand for at least 220 million sq ft of retail space by 2010.

The industry body noted that the government is spending heavily on infrastructure development, covering express highways, airports and hi-tech construction involving power plants and mega projects.

The Jawaharlal Nehru Urban Renewal Mission, Bharat Nirman and the National Highways Development Programmes are few of the prominent expenditure plans of the government that would give ample boost to the real estate sector.

“The growing business travel by the global business community in India has provided a boost to the hospitality sector. At present, the industry is operating at very high occupancy rates. Apart from expansion of the current hotels, several new hotels are expected to get erected,” Assocham said in the report.

It added that the hospitality sector has caught the attention of many global players including private equity funds. The joint ventures between Hilton-DLF, Emaar-MGF-Accor and Nirmal Lifestyle-Accor are likely to develop around 175 hotels across India in the next five years.

Special Economic Zones (SEZs), coming up across the country, are the new avenues of land development, Assocham said, adding “The total land requirement of about 33,808 hectares for the 234 formally approved SEZs clearly indicates the amount of land that would be available for development.”