Gujarat has cornered the maximum share, 41 per cent, of new investments attracted by the real estate sector across India during the last fiscal, apex industry body Assocham said on Monday.

“The realty sector in India attracted new investments worth over Rs 42,000 crore as of March 2013, which slipped from over Rs 92,600 crore a year ago,” according to a real estate sector specific analysis carried out by The Associated Chambers of Commerce and Industry of India (Assocham).

“While most of the States have seen a decline in attracting new investments in the realty sector, Gujarat has seen a surge of over 700 per cent as the State has attracted investments worth over Rs 17,000 crore as of March 2013 from just over Rs 2,000 crore a year ago,” said D.S. Rawat, National Secretary-General, Assocham, while releasing the analysis.

Kerala has also seen massive growth of over 550 per cent in attracting new investments in real estate, followed by Uttarakhand (400 per cent) and Rajasthan (175 per cent), while most of the States have seen a drop of over 50 per cent in new investments in the realty sector during the period under review.

Apart from Gujarat, Maharashtra (over 17 per cent), Karnataka (10 per cent), Tamil Nadu (eight per cent) and Uttar Pradesh (over six per cent) are the top five States with maximum share in new investments attracted by the real estate sector across India. New investments in the realty sector in Maharashtra have plummeted by over 55 per cent during the last fiscal, from Rs 16,000 crore to Rs 7,000 crore.

“The realty sector accounts for over 11 per cent share in total outstanding investments worth over Rs 122 lakh crore, attracted by different sectors from various public and private sources across India,” said Rawat.

Gujarat, Maharashtra, Haryana, Karnataka and Andhra Pradesh are the top five States with the highest share for attracting maximum outstanding investments in the real estate segment across India. Besides, these five States account for over 70 per cent of the total outstanding investments attracted by the realty sector across India.

The outstanding investments in real estate have risen by over 25 per cent throughout the country during the five-year period from 2008-09 and 2012-13.

“The real estate sector in India has been plagued by serious problems including falling sales, rising construction costs, dampened market sentiment overall, sluggish economic growth, high interest rates, high inflation and poor industrial production (IIP) due to which leading players in the sector had to sell their land to reduce debt, private equity players have trimmed their exposure in the realty sector and a general slowdown in various industries has hit commercial real estate,” he said.

“However, certain positive developments such as Parliament’s approval of foreign direct investment (FDI) in multi-brand retail would help attract foreign investments and give a fillip to the retail industry and simultaneously boost the demand for commercial real estate in the country.”

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