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FII's to invest 30,000 cr in Tier II cities


FII's to invest 30,000 cr in Tier II cities

Last updated: December 2 2006
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  • FII's to invest 30,000 cr in Tier II cities

    Its time Tier II cities experience the benefits of Realty Funds. Here a news extract to share with you all.

    Foreign institutional investors (FIIs) and real estate funds are so optimistic about India’s fast growing real estate sector that they propose to invest Rs 30,000 crore in the residential property market in Tier-II cities by the end of 2008.

    FIIs have already invested close to Rs 10,000 crore in the Indian real estate sector in the last two years.

    JP Morgan, Morgan Stanley Real Estate Fund, Warburg Pincus, Merrill Lynch and Lehman Brothers are exploring the option of investing over Rs 1,000 crore each in the sector.

    Real estate funds such as AIG Real Estate, Triconal, Xander and Saffron are also ready with their plans to invest between Rs 500 crore and Rs 1,000 crore each in the sector through the joint venture route, for which they are currently in the process of identifying the right partner.

    Some of the major Tier-II cities in India include Bhopal, Indore, Raipur, Nagpur, Madurai, Tiruchirapalli, Coimbatore, Burdwan, Asansol, Bhubaneswar and Ranchi.

    The fresh investments are aimed at providing quality housing in Tier-II cities as there is a huge dearth of quality housing.

    In Chennai, Sun Apollo has entered into a joint venture with Sriram Projects for $200 mn. Deutsche Bank has also bought 30% in Chennai-based Marg Constructions.

    According to Stan Erwin, senior managing director-development & investment division, TrammelCrow and Company, “We are now finalising plans to set up our real estate company called TrammellCrow Real Estate Company in India with the aim to develop residential, commercial and retail properties in Tier-II cities, at an initial investment of about Rs 1,000 crore from the beginning of 2007.”
    Source: Financial times

    This news piece definitely gives more reason for future investments in Tier II cities.
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