Indian Real Estate Needs a Technology Moonshot to Resolve Old Problems

By Sudie Sengupta

New Delhi, January 24, 2025: From Benares to Delhi, and Kolkata to Mumbai, India’s cities have attracted the hungry and the ambitious over centuries to create great buildings and public institutions. Our cities have had a glorious tradition of great successes. In the past few decades, however, urban India has been in the news for pollution, congestion and failure of construction projects. Must haves such as electricity and water, safe transportation and civic facilities have evoked frustration. Real estate development has failed to deliver on fundamentals.

It’s not about the most expensive houses, or grand corporate campuses but getting the basics right where we have observed most failures. Creative application of technology can offer solutions to bypass the bottlenecks and is a critical need in our resource constrained but high growth economy.

Why the Real Estate Sector has Underperformed

Today, the overall real estate industry employs close to a fifth of India’s workforce and influences nearly half of its GDP. But the sector continues to struggle with age old challenges – from land acquisition to delivery – often leaving an agonizing gap between what was promised and what is delivered. The poor attention to quality, lack of accountability, and disregard of norms is a collective failure of systems – both private and government. To this mix, if one adds the friction of infrastructure delays, and a regulatory sector that is trying to catch up in the best of times.

Consequently, we are seeing unplanned and poorly constructed buildings coexisting with premium gated societies with basic facilities presented as luxury living. To contribute to India’s ambition of a $20-trillion economy by 2040, this sector requires serious reimagination and new innovative ideas. Next generation technologies such as AI can provide the solution and the means for professionals and businesses to help drive strategic thinking and delivery efficiencies.

Local Demand is Key

Given the enormous potential and addressable demand across commercial and residential markets, the Indian real estate sector will continue to still be one of the most attractive growth opportunities for next three decades. Just to compare the size of the supply and the demand potential, as per a recent study by CII and CBRE, as of June 2024, the total commercial real estate office stock in India stood at 0.91 billion square feet. In comparison, (CBECS estimates from 2018) the 5.9 million U.S. commercial buildings contained a total of 97 billion square feet.

To support a rapidly growing employable population in India that will rise to comparable levels as the US, we clearly need a lot of office space to be constructed. Add to this the demand for housing over 120 million people moving into the cities by 2030 (equivalent to six new cities of the size of Mumbai). We are looking at a coordination ‘moonshot’ that could power the next two to three decades of growth not just fof India but the global economy. This must happen with awareness that India does not have the resources of the rich west or delivery discipline of China.

To succeed, industry leaders and the government must develop an unprecedented level of partnership to recreate the market ecosystem and deliver more with less while ensuring we achieve this in a sustainable way.

Investment in Technology Solutions Can Help

Technology designed to target specific problems can help us address many of our challenges associated with supply management, timely delivery, and quality controls. In the past decade, mobile commerce in ride sharing, food delivery, grocery retail or home services helped both providers and customers leapfrog information and infrastructure hurdles. They achieved this by creating open networks of connectivity and collaboration. A similar approach for Indian real estate business can help reduce the information gap, improve customer experience, and help ensure quality.

We may recall the times when the only source of property news was our neighborhood broker. Today, the action has moved to online where we can evaluate locations and prices. Social media is also active in playing its part bringing in perspective and nuanced information. While the online world has become ubiquitous, the human element is even more in focus as we need trust when making large investments such as real estate.

To address this complexity, business leaders need to develop what in marketing is referred to as ‘omni experience’. The approach is to take a wholistic view of the customers’ needs and fulfill expectations across the lifecycle of ownership. This includes supporting the customers journey – from buying a property to supporting ongoing maintenance, providing supporting infrastructure that improves livability and continuous improvement that evolves with the users’ needs. To be able to deliver, business need to be able to predict market demand and capability to manage the services, resolve bottle necks and conflicts. To navigate this journey, technology will provide the central nervous system – integrating activities across decision making layers. Smart technologies such as AI can be designed to aggregate data from many sources, help build scenarios, improve process efficiencies and track fulfillment.

Technology Must Work with Ground Realities

Launched in 2015, the Smart Cities initiative sought to upgrade infrastructure, living standards, and environmental quality. But taking a hi-tech approach without acknowledging the complex issues led to underestimating the enormity of the challenges. Hopefully, we have learned valuable lessons. Post Covid, we have seen the industry evolve. There is more focus on logistics, and supply chain coordination. Our successes over the past 10 years have ensured that the foundations needed are already present – a strong banking and financial system that has enabled digital payments, very deep skills available at a very affordable price, and a local tradition of building craftmanship. The challenge for leadership in India is to use more of technology to be at the forefront of innovation, enable better coordination and achieve a lofty ambition just like the United States government set its moonshot mission over 60 years ago.

The author has spent over 22 years working in the evolving interplay between people, real estate, and technology. His work spans Fortune 500 companies and government organizations across the world. He is based in New York City.