Retail and residential development is growing even faster.

Reasl Estate in India is fundamental driven! Now worries in the medium to short term. Spurred by IT the growth and a shortage of real estate, property markets are among the hottest in India.

Everyone knew that the parcel of land in the heart of Bombay, India's business hub, would bring a high price. But when the bidding ended on June 20 for the now-defunct Bombay Textile Mills and its 17.5 acres, it shocked even seasoned real estate developers in India. New Delhi-based DLF Group took the prize for $160 million, one of the highest prices ever paid for a piece of land in India. DLF plans to redevelop the huge space into a retail and commercial center. Had DLF's management gone balmy? Apparently not: The next day, the adjacent 5-acre Kohinoor Mills was bought by Bombay hotel and transport company Kohinoor Consolidated Transport Network Ltd. for $100 million - twice the price per acre of DLF's deal has really proved the real estate boom in india.

India's real estate markets are in a frenzy, driven largely by the rapid expansion of its information technology industry and the simultaneous growth of its middle class. In the land-starved island city of Bombay, property prices are up 25% in the past six months. Although no one keeps national statistics, international property consultant Knight Frank says there are thousands of commercial, retail, and residential projects springing up across the country. In 2004 developers erected 18 million square feet of commercial buildings in India. This year 23 million sq. ft. of new space will come on the market, and by 2009 the number will rise to 50 million, according to global real estate services provider Cushman & Wakefield. Retail and residential development is growing even faster.