Realty Czars Cash In On Demand Boom

THE REAL ESTATE PLAYERS in Fortune India’s list of wealthiest Indians saw a 78% increase in net worth to ₹4.63 lakh crore in 2024 from ₹2.59 lakh crore in 2023. Most in the elite group cater to three segments — residential, commercial and hospitality — powering India’s flourishing real estate sector. Kushal Pal Singh, DLF’s chairman emeritus, 92, continues to lead with ₹1.59 lakh crore net worth, a rise of 73.9% from 2023. Mangal Prabhat Lodha, founder, Macrotech Developers, is the second-richest, with his net worth rising 88.16% to ₹96,556 crore. Irfan Razack, chairman & MD, Prestige Estate Projects, and his brothers Rezwan Razack and Noaman Razack, are third in this year’s list of realty czars with impressive 221.9% increase in net worth to ₹47,690 crore. The others in the list are Vikas Oberoi, chairman and managing director of Oberoi Realty and Manoj Menda and Raj Menda of RMZ Corp Holdings. Oberoi’s wealth surged 66.67% to ₹43,490 crore, while Mendas saw a modest growth of 12.11% to ₹41,472 crore.

The trend is a reflection of India’s booming $400 billion (₹33 lakh crore) real estate market. Stakeholders say it’s just a start. The industry can grow at a CAGR of 25.6% to $1.3 trillion by 2034 and $5 trillion by 2047, says realtors’ body CREDAI. India’s real estate sector has 36 billion-dollar companies, more than China’s. The number was seven just six years ago.

The Frontrunners

Leading from the front are DLF, Macrotech and Prestige Estates. K.P. Singh’s DLF, led by his son Rajiv Singh since 2020, is India’s largest developer. Its revenue rose 16% to ₹6,958 crore in FY24. “Our focus is to expand in both residential and commercial segments. We are entering new geographies like Mumbai and Goa. The strategy is to meet the aspirational needs of the market,” he says, adding that both residential and commercial continue to do well for the group.

Residential remains the growth engine of the thriving sector, which accounts for one-fifth jobs in the country. Here, luxury and premium have emerged as key sub-categories. India’s residential sector recorded “unprecedented” sales and launches in 2023, says Anshuman Magazine, chairman & CEO, India, South-East Asia, Middle East & Africa, CBRE. “Major banks disbursed ₹2.7 lakh crore housing loans up to January 2024, a 37% annual surge. The year ended with housing sales surpassing 3,00,000 units, a 10-year record, and over 3,00,000 launches,” he says.

Macrotech Developers (formerly Lodha group), helmed by Abhishek Lodha, says pre-sales soared to “an all-time high” of over ₹14,500 crore in FY24, a 20% increase from previous year. Macrotech added 10 new projects with combined gross development value (GDV) of ₹20,300 crore in FY24. “Pre-sales across segments, locations and cities highlight sustainability of our growth trajectory, a rarity in the industry,” says Lodha.

Under Irfan’s leadership, Prestige signed a ₹2,001 crore deal with Abu Dhabi Investment Authority and Kotak Alternate Investment Fund this year with GDV of around ₹18,000 crore. “A lot of inventory is still to come. The market is still pretty strong,” Razack said during a recent earnings call.

Billionaires Tap Aspirational Indians

Premium and luxury segments, traditionally preferred by a select few, have seen a notable shift. “Demand in premium and luxury segments has surged with sales of properties priced ₹2 crore or more quadrupling in 2023 compared to pre-pandemic levels,” says Magazine of CBRE. “Increasing incomes and a growing aspirational class” have increased demand for luxury and premium housing, says Anuj Puri, chairman, ANAROCK Group, a real estate services company. Premiumisation has taken root with higher-priced homes driving volumes, says Knight Frank’s ‘India Real Estate H1 2024’ report. “Premium housing priced over ₹1 crore has emerged as the largest segment, accounting for 41% of sales,” it says.

That is probably why Oberoi Realty’s Vikas Oberoi saw a 66.7% jump in net worth to ₹43,490 crore. The company is known for high-end properties with focus on “aspirational” consumers. Its FY24 profit surged marginally to ₹1,925 crore while revenue rose to ₹4,495.7 crore from ₹4,192.5 crore a year ago. Oberoi says the company recorded “highest-ever quarterly and annual profitability” last fiscal. “We entered Thane market and launched Elysian Tower-C at flagship Oberoi Garden City, Goregaon,” he says, adding the company remains confident of demand as Indians look to buy bigger homes.

The Commercial Story

In commercial segment, office space absorption grew 11% to 64.4 million sq. ft. in 2023, the second-highest annual leasing post 2019, led by Bengaluru, Delhi-NCR, Hyderabad and Chennai. “The commercial (office) market in India’s top seven cities exhibited robust growth in 2023, characterised by increase in new office supply and net office absorption by 3% and 6%, respectively. This positive trajectory continued in H1 2024, with new office supply and net office absorption reaching 41% and 59%, respectively, of full 2023 figures,” says Puri of ANAROCK. Office leasing was broad-based in H1 2024, says Vimal Nadar, senior director & head of research, Colliers India, an investment management company.

Raj and Manoj Menda of Bengaluru-based RMZ Corp Holdings are bullish on office growth. The developer aims to execute 12 million square feet (msf) office space this year and expand to 50 msf by 2029.

Post-pandemic, India’s real estate market has shown renewed vigour, with average value of homes rising 10-20% in key cities. “Rising demand has pushed up property prices in both primary and secondary markets, attracting investors,” says Kanika Gupta Shori, founder and COO, Square Yard, a real estate marketplace. This is playing out well for developers like Mumbai-based Phoenix Mills. Atul Ruia of Phoenix saw a 97.65% increase in net worth in 2024. His strategy of transforming Phoenix from a once-dying textile business to a real estate major has worked, with the company reaching the two crore sq. ft. development milestone. He retired as MD in 2019 and is currently the chairman of the company. Phoenix, under new MD Shishir Shrivastava, is focusing on “premiumisation.”

Chandru Raheja of K. Raheja Group is the only billionaire in the Fortune India Rich List who saw a decline in net worth in 2024. His wealth dipped 19.5% to ₹19,751 crore. The group operates three key verticals — Mindspace Business Parks, retail chain Shoppers Stop and Chalet Hotels.

The next in line are Pradeep Kumar Aggarwal, Ravi Aggarwal, Devender Aggarwal and Lalit Kumar Aggarwal of Signature Global; their net worth stood at ₹14,951 crore in FY24. Led by chairman and MD Pradeep Aggarwal, the Gurugram-based residential and commercial builder’s share price has risen 208% in almost 11 months since listing in September 2023. “We are focusing on Gurugram with inventory of 30 million and GDV of ₹50,000 crore. Noida and Delhi will be our next markets,” says Aggarwal, who started Signature Global in 2014 to provide affordable housing. Signature has 13% market share in Delhi-NCR, he says.

Bright Outlook

Residential real sector is poised to continue the momentum in sales and new launches, says Magazine of CBRE. “Extensive infrastructure projects, including transportation networks, highways, airports and metro systems, are expected to foster new residential developments,” he says. Puri says the commercial sector, particularly office spaces, continues to show promise, “driven by robust growth of IT-ITeS industry and global capability centres.”

Fortune India’s 2024 realty rankholders believe this, too. As per Prestige’s Razack, the market is still strong. “There is demand and there is appetite. Whatever we’ve launched has got consumed,” he says. Signature Global’s Aggarwal says he is bullish on housing demand. “In Delhi-NCR, total supply, including from Tier-II developers, is 25,000-26,000 units. This is negligible,” he says. In China, despite a slowdown in housing, annual supply is 60-65 lakh, he says. “India, with five-six lakh annual production, has a huge potential,” he says. Is India ready for the next level of growth in real estate?