The Indian real estate market is expected to touch US$ 180 billion by 2020. The housing sector alone contributes 5-6 per cent to the country's Gross Domestic Product (GDP). The private equity investments in Indian real estate increased 26 per cent to a nine-year high of nearly Rs 40,000 crores (US$ 6.01 billion) in 2016. According to data released by Department of Industrial Policy and Promotion (DIPP), the construction development sector in India has received Foreign Direct Investment (FDI) equity inflows to the tune of US$ 24.28 billion in the period April 2000-December 2016.
However for many years in the past, the real estate industry hardly found favour with the brightest talent in the country. With owner driven firms carrying out businesses in the conventional style, the young talent shied away from joining this industry. However with changing times, real estate projects have changed in their size and complexity. Investment by private equity players has also necessitated better quality of management. Introduction of regulations like RERA and GST will need large degree of compliance in the industry and also need a large qualified talent pool to ensure compliance.
With increased regulatory pressures on the real estate developers to complete their projects in the committed time there would a huge demand for project management professionals. With intense competition amongst developers working under a ‘zero sum game’ there will be a great demand for bright architects, landscapers, structural designers and civil engineers. With increased demand for retail and commercial spaces, there will be a huge demand for HVAC engineers, lighting experts and interior designers. With increasingly tighter environmental laws and increased awareness amongst developers there would also be a great need for environment engineers and professionals.
With increased pressure on developers to move on to professional management there would be a huge demand for bright MBAs from the best B-schools to take over top CxO positions. With family businesses making way for professionally run businesses, there will be a need for bright managers both at the top and the middle level coming in from different categories of management schools. The PE funds both of FDI and Indian origin would be more comfortable working with professional teams rather than with family owners.
Even the real estate dedicated PE funds would be employers of the brightest talent in the country who would be specialized to deal in real estate projects. With REITs (Real Estate Investment Trusts) stepping into the Indian markets there would be a huge need for bright management talent specializing in strategy and finance. This would also find place for a large pool of legal talent. This legal talent would also increasingly find employability with developers, large contractors, PE funds and REITs.
With reduced dependence on petty contractors there would be an emergence of large construction contracting firms who would be employing some of the finest civil engineers, architects and MBAs specializing in project planning, management and their execution. With large dependence on IT for better execution, the various branches of the real estate industry would draw on a very large number of Information Technology (IT) and Computer Engineers. The large employment possibility of IT engineers would both be with the real estate companies as well as with IT companies to whom the IT functions would be out sourced.
With complex funding and structuring needs, the real estate companies would be employing some of the finest finance and accounting professionals. With increased tax compliance and share holder accountability the real estate companies would also be large employers of the finest Chartered Accountants and Company Secretaries in the country. On the legal front besides finding employment in the top law firms servicing the real estate industry, the real industry itself will employ some of the finest legal brains in the country.
With large projects spread over different cities in the country and with marketing offices spread over major cities of the world, the real estate industry would be home to some of the sharpest marketing brains in the country and would be a large employer of a huge number of marketing MBAs in the country. Besides employing a large sales force made up of MBAs and other sharp minds, the industry would also employ a large number of HR experts to run these companies and take care of the staffing and training needs of these companies.
With a global market at their disposal to cater to the Indian customer clientele spread across various countries the industry would also employ some of the finest advertising and media brains in the country both directly and indirectly. Also with the increased popularity of ecommerce there would be a huge need for software developers and digital marketing professionals in the real estate industry for creating and running these platforms.
Lastly, with the legal need of CSR spending, there will be a huge need for experts who could handle the social side of the businesses and connect with the community. This will create employment for a different set of professionals who specialize in social sciences. Besides, innovation would a key to surpass competition; the real estate industry would also employ some of the best research engineers and scientists in the country both directly and indirectly.
With a large amount of consolidation and transformation in the offing, the best is yet to come for a more transparent and well regulated real estate sector. It would soon shed its un-touchable tag and draw the best talent from the best institutions from both within and outside the country.
By 2022, the real estate industry in the country is poised to be the largest employer of the brightest talent in the country.
Contributed by -
Dr. Sanjay Runwal - BE (Elect), PGDADRM, MSc (Strategic Planning), PGCBRM, Fellow (Business Strategy)
CEO and Founder – Strategic Business Solutions (India)
The author has an experience of over 22 years as a real estate developer
(June 21, 2017)