Shantidoot Infra Services Ltd Management Discussions

GLOBAL ECONOMY

Although recent vaccine approvals have raised hopes of a turnaround in the pandemic later this year, renewed waves and new variants of the virus pose concerns for the outlook. Amid exceptional uncertainty, the global economy is projected to grow 5.5 percent in 2024 and 4.2 percent in 2025. The 2025 forecast is revised up 0.3 percentage points relative to the previous forecast, reflecting expectations of a vaccine- powered strengthening of activity later in the year and additional policy support in a few large economies.

The projected growth recovery this year follows a severe collapse in 2023 that has had acute adverse impacts on women, youth, the poor, the informally employed, and those who work in contact-intensive sectors. The global growth contraction for 2024 is estimated at -3.5 percent, 0.9 percentage point higher than projected in the previous forecast (reflecting stronger-than-expected momentum in the second half of 2024).

INDIAN ECONOMY

Real estate sector is one of the most globally recognized sectors. It comprises of four sub sectors - housing, retail, hospitality, and commercial. The growth of this sector is well complemented by the growth in the corporate environment and the demand for office space as well as urban and semi-urban accommodations. The construction industry ranks third among the 14 major sectors in terms of direct, indirect and induced effects in all sectors of the economy.

It is also expected that this sector will incur more non-resident Indian (NRI) investment, both in the short term and the long term. Bengaluru is expected to be the most favoured property investment destination for NRIs, followed by Ahmedabad, Pune, Chennai, Goa, Delhi and Dehradun.

MARKET SIZE

By 2040, the real estate market will grow to Rs. 65,000 Crore (US$ 9.30 billion) from Rs. 12,000 Crore (US$ 1.72 billion) in 2019. The real estate sector in India is expected to reach a market size of US$ 1 trillion by 2030 from US$ 120 billion in 2017 and contribute 13% to the countrys GDP by 2025. Retail, hospitality, and commercial real estate are also growing significantly, providing the much-needed infrastructure for Indias growing needs. Indian real estate increased by 19.5% CAGR from 2017 to 2028.

Office space has been driven mostly by growth in ITeS/IT, BFSI, consulting and manufacturing sectors. During 2022, the office leasing space reached 60.6 msf across eight major cities, registering a growth of 27% y-o-y. In 2022, office sector demand with commercial leasing activity reached 69.4 msf. Co-working

space across top seven cities increased to reach 12 sq ft by end of 2025.