With IT and BPO industry alone demanding 100 million sq ft area in the next five years, an annual investment of Rs 2,500 crore (Rs 25 billion) will be required by the real estate industry otherwise rentals may shoot up due to short supply.
"Nasscom estimates that IT and BPO companies will need another 100 million sq ft at least in next five years. IT and BPO industry will drive real estate industry and the trend has already started," Nasscom President Kiran Karnik said.
Overall IT industry is expected to grow at 29 per cent annually to as much as 70 billion dollar in 2008, he added.
Expecting real estate market recovery by 2005-06, he said conservative estimates suggest requirement of 12 million sq ft this year, which would grow to an average 20 million sq ft in 2005-06 and 25 million in the subsequent year.
According to real-estate industry sources, if there was no match in investments in the sector to the projected demand, then tight supply could drive up the rentals.
Sources also said there was a need for liberal foreign direct investment policy and reforms in Rent Control Act and stamp duties for attracting investment to the sector.
In tune with the captial requirements in the real estate sector, cement demand would go up by five million tonne, steel 1 million tonne and 600,000 tonne of glass by 2008.
With real estate expected to boom, the sector is expected to create an additional 2.2 million direct employment.
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