Indian property market and its regulations need to be reformed further to attract foreign direct investment while the demand for space for business process outsourcing is expected to cross over two crore square feet in the next three-five years, according to Knight-Frank Real Estate advisory services firm.
"Most ownership of realty in India is in the hands of households and this is not necessarily a capital efficient practice," Knight Frank's global research head Stephen Mallen said in Mumbai on Wednesday.
Corporate and institution ownership of real estate would increase liquidity for properties, Mallen said.
On the policy guidelines for FDI in real estate, he said the three-year lock-in period for foreign equity portion was not an investor friendly measure.
The regulatory system for the sector, especially the residential segment, should be reformed to attract FDI, else the country would lose opportunities to China, he added.
Improvement in access to credit, cut in interest rates and tax incentives have given a boost to housing construction market, he said, and pointed out that the Indian retail sector was growing at a fast pace and 200 malls are slated to come up in the next five years.
Realty advisory firm's regional chairman Pranay Vakil said BPOs would need over two crore square feet space in places like Gurgaon, Kolkata, Chennai and Mumbai.
Properties for BPO units would be built on open-office space concept with high ceilings and provision for voice filtration, Vakil added.