CREDAI Bengal-CBRE Report ‘West Bengal: A beacon of growth in the East’ identifies the state as an entry point for South East Asian and ASEAN countries
The report was launched at CREDAI-CBRE “STATECON 2019 – Poised to Rebound” in West Bengal
Kolkata, November 28, 2019: – CREDAI Bengal, in association with its knowledge partner CBRE, today released a joint report titled ‘West Bengal: A beacon of growth in the East’ at STATECON 2019 in Kolkata. The report encapsulates West Bengal’s enabling policy environment, impetus to infrastructure growth and favorable business environment, that are helping the state attract business and thereby investments, in an unprecedented manner.
The CREDAI Bengal-CBRE knowledge paper ‘West Bengal: A beacon of growth in the East’ was unveiled by Shri. Amit Mitra, Hon’ble Minister-in-Charge, Finance Department, Information Technology and Electronics & e-Governance, Industry Commerce & Enterprises, Micro Small & Medium Enterprises and Textiles, Govt. of West Bengal, Smt. Chandrima Bhattacharya, Hon’ble Minister of State with Independent Charge, Housing Department, Govt. of West Bengal, Mr. Nandu Belani, President, CREDAI Bengal and Mr. Anshuman Magazine, Chairman & CEO – India, Southeast Asia, Middle East & Africa, CBRE.
West Bengal: A beacon of growth in the East’ is a compendium of the key growth drivers which are shaping West Bengal and are instrumental in crafting the future of the state.
Commenting on the launch of the report, CREDAI Bengal President, Mr. Nandu Belani, President, CREDAI Bengal said, ““We have designed the second of CREDAI Bengal Statecon 2019 as an interactive platform for the real estate stakeholders of the state, to discuss emerging industry trends, deliberate on possible finance avenues in the backdrop of a liquidity crunch, shed light on PropTech, learn from success stories of new entrepreneurs, understand what it means for the real estate industry and shift the focus on emerging sectors in real estate. This year’s edition also assessed global practices that can be infused into our local set-ups. “
Mr. Belani further added, “The overriding objective was to essentially delve into the state’s real estate scenario and asses its future prospect. The aspirations of the tier II and tier 3 cities were also addressed at this conference and joining us in co-hosting this event are CREDAI Bengal’s city chapters namely CREDAI Asansol, CREDAI Howrah- Hooghly and CREDAI North Bengal. We are very excited to be hosting this conference for the 2nd year pitted against a certain ambience of uncertainty, waning sales and disruptive legislations. However, we remain avowedly optimistic about real estate and its growth and as the conference theme echoes, we are certainly poised for a rebound”.
While releasing the report, Anshuman Magazine, Chairman and CEO, India, South East Asia, Middle East and Africa, CBRE said, “The state’s large talent pool, transparent governance processes and much-improved social and physical infrastructure have made its position stronger as a veritable business hub. Additionally, the real estate dynamics in West Bengal, especially in Kolkata, is at a stage wherein controlled supply is boosting absorption – which in turn is further helping the state’s RE growth trajectory. With the right policy incentives, West Bengal is expected to put itself on the global investment map in the near future.”
The conference with the theme ‘Poised to Rebound’, STATECON 2019 witnessed participation from think- tanks, Government Officials, Policy Makers, Economists, Financial Institutions, Investors, Investment Bankers, Real Estate Developers and Industrialists.
Here are the key highlights of the report:
· The state has the country’s third largest road coverage spanning more than 3 lakh km and the second largest metro rail network which includes India’s first underwater Metro tunnel. Its capital city, Kolkata, is a major commercial and industrial hub of eastern India and is well connected with the rest of India via rail, road, air and water
· Rapid infrastructure development improved multi-modal transportation network and focus on skill development have boosted the city’s image as a business-friendly centre. Further, the country’s mega infrastructure projects such as the Dedicated Freight Corridor (DFC), Sagarmala project and inland waterways project are expected to further improve the city’s prospects as an investment destination
· Various initiatives by the state has proved to be immensely productive as about 417 start-ups have emerged in the state since 2016. Start-ups in Kolkata have raised USD 43.7 million across 37 deals from 2014-2019. For its efforts, the Department of Industrial Policy and Promotion (DIPP) has recognized the state as an ‘Aspiring Leader’ in the State Start-up Ranking 2018. Further, the state has performed well on the seven-pillar framework for start-up ranking, positioning itself as one of the third highest scorer.
· Some major infrastructure and policy initiatives that are expected to boost the state’s prospects as a profitable investment destination are:
o Eastern Dedicated Freight Corridor (EDFC)
o Amritsar – Kolkata Industrial Corridor (AKIC)
o Inland Waterways
o West Bengal IT Policy 2013 – 2018
o West Bengal Industrial Scheme – 2013
o MSME Policy – 2013 and 2018
o Start-up Policy 2016-2021
o Nodal development for start ups
Investment opportunities in West Bengal
· To encourage private investments across the country, the central government has identified select projects in all states across various segments such as real estate, infrastructure, auto, textile, transport, etc. It has been encouraging private players to participate in these projects under the public-private partnership (PPP) model.
· West Bengal too has identified several projects across the spectrum, for private investment. These include the USD 1.27 billion Pashchim Bardhaman – Purba Medinipur Expressway Project and the USD 889 million Bandu Nala Hydel Project in Purulia. However, when compared with other states in terms of investment opportunities, the state still has a long way to go.
West Bengal’s real estate market – Kolkata-centric but growth moving towards tier II cities
· West Bengal is considered to be one of the prominent real estate markets in the country, especially because of its capital, Kolkata.
· While Kolkata remains the state’s primary real estate market, the infrastructure push (examples include the Andal airport, the Silicon project) and a positive policy scenario has propelled RE growth towards tier II cities, such as Durgapur, Siliguri and Darjeeling – which have consistently attracted investor interest over the years.
Kolkata – West Bengal’s engine for RE growth
· Proximity to port-based industrial regions such as Haldia has also resulted in the city being one of the major trading hubs in Eastern India. The advent of foreign players has globalized the sector, including local developers.
The office sector – The frontrunner in RE growth:
o Currently, the city’s office stock stands at about 32 million sq. ft. Further, about 2 million sq. ft. investment grade developments are lined up for completion across the micro-markets of CBD, SBD and PBD by the end of 2020
o Real estate activity in the city has traditionally been concentrated in the Central Business District (CBD) areas of Park Street, Camac Street, Acharya Jagdish Chandra Bose Road, New Market, Dalhousie, etc. with the development profile primarily consisting of institutional buildings – housing government and Public Sector Undertaking (PSUs) offices
o With the construction of New Town at Rajarhat underway and the extension of Salt Lake’s Sector-V underway, Kolkata is also emerging as a preferred IT/BPO destination of Eastern India
o In addition, development initiatives undertaken by the West Bengal Electronics Industry Development Corporation (WEBEL) have also boosted commercial activity, particularly in the Salt Lake region.
The residential sector – Expanding to newer horizons:
· From 2000s onwards, new investment-grade residential properties were largely seen in the eastern region of the city (Salt Lake and Rajarhat); these predominantly consisted of mid- and high-end projects, plotted developments and townships
The retail sector – High growth potential:
· Currently, Kolkata has about 7 million sq. ft. of organized retail space. Expanding city limits and a positive demographic dividend means that there is tremendous potential for growth in the retail sector.
The logistics sector – Keeping pace with changing times
· The advent of Goods and Service Tax (GST), growing popularity of e-commerce and the rapid growth of tech in real estate have given a boost to the logistics sector across the country
· In addition to these factors, Kolkata’s strategic location as the entry point to the country’s east and the state’s industrial prowess have further boosted the city’s logistics industry. As a result, the West Bengal government expects the logistics sector market of the state to grow at a rate of 9-10% over the next few years
· As a result, demand for logistics space has grown threefold since 2015. This has led to the inflow of institutional funding from various corporates looking to set up their facilities in the city. As of now, the city has close to 13 million sq. ft. of Grade A logistics developments on NH-2, NH-6 and Taratala. In addition, the government is also developing a logistics market near the city periphery in Madhyagram.
CREDAI Bengal is the West Bengal chapter of Confederation of Real Estate Developers’ Associations of India (CREDAI), the apex body of real estate developers in India. (CREDAI has more than 12500 real estate developers as members, with a presence in 23 states and 205 cities). CREDAI Bengal is the organized representation of West Bengal’s real estate sector, comprising 3 chapters in West Bengal with more than 450 members. Members comprise real estate developers engaged in the development of urban and social infrastructure projects (residential & commercial development including IT/ ITeS buildings, hospitals, hotels, logistics, malls and similar amenities). We collaborate with Government Departments and agencies to pursue issues related to the state’s real estate development and consequently promote West Bengal as a significant investment destination. Encouraging and implementing a Code-of-Conduct for self-regulation to all our members, we work with other CREDAI chapters to exchange best practices and help grow the real estate sector in Eastern India. CREDAI Bengal regularly organises events and exhibitions to propagate transparent communication between industry and consumer as well as to promote and exhibit real estate projects of members. It also organises knowledge sharing events for the benefit of its real estate stakeholders. CREDAI Bengal concurrently works at relationship building between industry and government in a bid to create a positive atmosphere for sectoral growth. We have welcomed the implementation of West Bengal Housing Industry Regulation Act (WBHIRA) in the state and look forward to ushering in a new era of ethical and transparent business practices in the real estate industry.
About CBRE Group, Inc
CBRE Group, Inc. (NYSE:CBRE), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (based on 2017 revenue). The company has more than 80,000 employees (excluding affiliates) and serves real estate investors and occupiers through approximately 450 offices (excluding affiliates) worldwide. CBRE offers a broad range of integrated services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. CBRE was the first International Property Consultancy to set up an office in India in 1994. Since then, the operations have grown to include more than 8,000 professionals across 10 offices with a presence in over 80 cities in India. As a leading international property consultancy, CBRE provides clients with a wide range of real estate solutions, including Strategic Consulting, Valuations/Appraisals, Capital Markets, Agency Services, Asset Services and Project Management. The guiding principle at CBRE is to provide strategic solutions that make real estate holdings more productive and economically efficient for its clients across all service lines.
CBRE has been included in the Fortune 500 since 2008, ranking #207 in 2018. It has also been voted the industry’s top brand by the Lipsey Company for 17 consecutive years and has been named one of Fortune’s “Most Admired Companies” in the real estate sector for 6 years in a row.