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ING real estate may set up fund to invest in India


ING real estate may set up fund to invest in India

Last updated: May 21 2007
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  • ING real estate may set up fund to invest in India

    ING Real Estate plans to make its first investments in India this year and could set up a fund to pour more money into the country in 2008, despite expectations the raging property market will soon stumble.

    Robert Lie, Asia head of the world's biggest property investment firm, said strong interest in Indian property among ING's clients had prompted the push.
    "We believe India will be a very important market and you can clearly see the beginnings," Lie said.
    Property investors, especially from the United States, have flocked to India since the country eased rules on inward investment in the construction industry in early 2005.
    They are attracted by a yearning for new homes among a youthful middle class, whose income is growing at 12 per cent a year. An economy growing at over nine per cent a year is fuelling demand for shopping centres and offices.
    But with land prices doubling in major cities over the past two years, interest rates rising, and oversupply of apartments and shopping centres in some hotspots, many in the industry believe the property market is set for a price slide of as much as 40 per cent.
    Lie expected some investors would get burnt in India. "Because of the enthusiasm and longer term opportunities, some people forget to be realistic in the short term," he said.
    "I expect that the way the market is now, you'll see winners and losers," he said. "We're looking at doing our first deals, but we'll do them in a careful way."
    Fund management firms, such as Kotak Realty Funds and Trikona Capital, are busy raising funds for Indian property, while Morgan Stanley, Citigroup and privately held Tishman Speyer head up a group of big-name US investors in the sector.
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