NAREDCO: Focus on Financing, Prefabrication, 3D printing & Sustainability

NAREDCO focuses on innovative trends transforming India's construction sector like financing, prefabrication, 3D printing, and sustainability with green initiatives.

Collaborations, strategic planning, and initiatives like NAREDCO Nextgen, NAREDCO Mahi and formation of NAREDCO Finance Committee are helping in overcoming industry challenges and fostering growth.

G Hari Babu - National President, NAREDCO

Innovative Trends Transforming India's Construction Sector

The Indian real estate sector is projected to grow from USD 180 billion in 2020 to USD 1 trillion by 2030, reflecting a notable CAGR of 19%. This growth is supported by various government initiatives, foreign investments, and global collaborations. However, with such growth comes the necessity to address inherent challenges such as cost and schedule overruns, shortage of skilled labor, and sustainability concerns.

Innovative Business Models and Trends

New business models and trends are reshaping the construction sector, offering solutions to long-standing issues. For instance, the introduction of Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (INVITs) as alternative financing mechanisms has been transformative. These instruments provide a steady income stream and promote transparency and liquidity in real estate investments.

Government initiatives like the Pradhan Mantri Awas Yojana (PMAY) and the Real Estate Regulatory Act (RERA) have also played key roles. PMAY has been praised for its potential multiplier effects on the economy, including employment creation. Pivoting this scheme towards green building could create even greater positive spillover effects.

New Products, Materials, and Processes

Addressing productivity, efficiency, and sustainability, the construction industry is adopting innovative products, materials, and processes. The shortage of skilled labor in India, where only about 4% of the workforce is formally skilled, contrasts sharply with countries like Germany (74%) and South Korea (96%). To bridge this gap, the Pradhan Mantri Kaushal Vikas Yojana (PMKVY) offers skill training to enhance employability and income potential.

New materials such as self-healing concrete, which repairs its own cracks, and aerogels, known for their excellent insulating properties, are revolutionizing construction. Prefabricated and modular construction methods are also gaining traction, significantly reducing construction time and waste. These advancements not only improve efficiency but also contribute to sustainability by minimizing resource use.

Technological Innovations

Technological innovations are poised to transform traditional construction practices. Robotics and automation, including 3D printing and precast methods, are being integrated to enhance construction processes. 3D printing, for example, allows for rapid construction of complex structures with minimal waste, while precast methods improve quality control and speed.

Digitalization is another critical trend, with technologies like Virtual Reality (VR), Augmented Reality (AR), and Mixed Reality (MR) changing design and construction processes. These tools enable more precise planning and real-time adjustments, reducing errors and improving project outcomes.

Drones equipped with LiDAR technology are being used for surveying, inspections, and data acquisition. They provide accurate topographical maps and monitor project status, ensuring adherence to timelines and safety standards. These technologies also enhance worker safety and machine health monitoring, mitigating risks associated with manual inspections.

Forward-Thinking Strategies and Collaboration

Collaboration and strategic planning are essential to overcoming industry challenges and seizing opportunities. Initiatives like NAREDCO Nextgen and NAREDCO Mahi provide platforms for young professionals and women entrepreneurs to network, share knowledge, and stay updated on trends in innovation and sustainability. The formation of the NAREDCO Finance Committee aims to address financial challenges, ensuring better access to funds and fostering growth.

The establishment of the National Institute of Real Estate Development (NIRED) is another commendable step, offering training and skill development to the workforce while serving as a research hub on real estate matters. These collaborative efforts and strategic initiatives are crucial for driving the industry forward.

Sustainability Initiatives

Sustainability is increasingly central to the construction industry, driven by the imperative to cut waste, CO2 emissions, and overall costs. Adherence to green building standards like LEED and IGBC underscores the sector's commitment to environmental preservation. Energy-efficient buildings not only lower operational expenses but also command higher prices in the market, ensuring financial viability.

Government initiatives such as the Smart Cities Mission and Affordable Housing Program highlight the importance of sustainable development. The "India Real Estate: Vision 2047" report by NAREDCO and Knight Frank predicts a $5.8 trillion industry by 2047, emphasizing sustainability's pivotal role in this growth.

Builders and developers play a crucial role in shaping India's construction future. Their decisions on materials, designs, and construction methods directly influence the environment and sustainability of buildings. Choosing eco-friendly materials such as recycled, locally sourced, and low-impact options reduce construction's carbon footprint. Adopting energy-efficient designs and technologies like LED lighting, efficient HVAC systems, and solar panels can greatly cut a building's energy use and greenhouse gas emissions. Installing water-saving features such as rainwater harvesting systems, low-flow fixtures, and wastewater treatment plants minimizes water waste.

Incentives and Market Growth

The Indian government has introduced several incentives to promote green buildings. The Pradhan Mantri Awas Yojana (PMAY) and the Eco-Niwas Samhita are significant schemes that can boost the green residential buildings sector in India. Also, the Green Rating for Integrated Habitat Assessment (GRIHA) aims to reduce resource usage by up to 30%. Various state governments offer incentives like increased floor-to-area ratio (FAR) for GRIHA projects and subsidies on capital investment for green projects. These incentives have led states like Tamil Nadu and Maharashtra to build the highest number of green buildings in the country.

Despite its early stage, the green building market in India is growing steadily, with a projected compound annual growth rate of around 20% between 2021 and 2026. Builders and developers play a crucial role in this transformation by adopting sustainable materials, energy-efficient designs, and smart technologies.

The Indian construction sector is experiencing substantial changes, driven by innovative business models, advanced technologies, and a strong focus on sustainability. By embracing these changes, the industry can address challenges, enhance productivity, and contribute to economic growth while ensuring environmental preservation. The future looks promising, with opportunities for continued growth and development in a sustainable manner.