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- Foreign Players all set to invest in Indian Real Estate
With Indian real estate growing by leaps and bounds, the realty market has arrived to a place whereby foreign investors with deep pockets are desperately in a look out to invest in commercial and residential projects in India.
Are you guys surprised??? Well! The following news will make you believe…….
According to the latest news, 150 overseas private equity funds have lined up their chests to join realty biggies in India. Also, a total of $10 billion has already been raised through the same route and is expected to put into the development process within the next two years.
How such a great revolution can leave our Indian and multinational institutions unaffected? Conglomerates like J P Morgan, Falcon, 3i, Blackstone, Carlyle, Kotak Real Estate, IL&FS, ICICI, and HDFC are all set with their respective piggy banks to make a mark into the sector.
With the changing scenario, the contribution of Private investors has become critical in the Indian real estate investment market. At the end of the year 2005, the total Indian private equity volume was estimated to be USD 1.6 billion, accounting for 40 per cent of the Indian real estate capital market. As for now, it is growing at double-digit rates.
LONG LIVE THE INDIAN REALTY SECTOR!!! :)
I believe such plans will give an unparalleled boost to the growth of our Indian economy. What say friends?CommentQuote0Flag
- FDI Share in Real estate projected to rise
FDI’s Share in Real Estate projected to touch 26% by Mar ‘07
Study on Future of Real Estate Investment in India’ brought out by ASSOCHAM says real estate market is growing @ 30% pa
FDI’s share in domestic real estate market will shoot up by at least 10% by March 2007 and touch about 26% level from 16% of fiscal 2005-06, in view of growing interest of global real estate players into Indian real estate market and increasing demand of office space particularly in IT & BPO, according to The Associated Chambers of Commerce and Industry of India (ASSOCHAM).
The overseas investments will also be finding larger space in Indian SEZs and increasing number of shopping malls that will naturally fatten their share in real estate market, adds findings of the `Study on Future of Real Estate Investment in India’ brought out by ASSOCHAM.
Since, ASSOCHAM expects cut throat competition to emerge between domestic and overseas investors in real estate, the Study forecasts that of estimated US$ 60 billion future market size of real estate business in India, the share of foreign investments will be within the range of US$ 25-28 billion by 2010.
In 2003-04, India received total FDI inflow of US$ 2.70 billion, of which only 4.5% was committed to real estate sector. In 2004-05 this increased to US$ 3.75 billion of which, the real estate share was 10.6%.
However, in 2005-06, while total FDIs in India were estimated at US$ 5.46 billion, the real estate share in them was around 16%. The Study, nevertheless projects that in 2006-07, total FDIs will touch about US$ 8 billion in which the real estate share is estimated to be about 26.5%.
- Turning dreams into Reality - Easy or difficult for foreign investors?
Hello everyone! :)
Luckily, I also have something to add to the conversation regarding the foreign investment that can bring new twist in an old story!!!
Although, loads of dollars are waiting to get into the Indian realty sector but doing business in India is not going to be a cakewalk for the foreign investors. They have many hurdles to overcome to make their mark in the newly developed separate asset class. One of the biggest stumbling blocks is a difficulty to cope up with the fledgling market. Since, Indian market is new to the concept of institutional funding and the local developers here have never worked in collaboration before; it makes the country a complex market for the investors to operate in.
Global names like Morgan Stanley, Trikona Capital, Starwood, and Citigroup are among the big players of the realty sector who are desperately waiting to invest in the Indian real estate. However, the surprise is yet to come. Foreign funds have already committed $5 bn to the market. According to the real estate analysts, twice of this amount is coming up in the pipeline in the face of another installment of the investment series.
Talking about other foreign real estate investors like Starwood Capital, which is all set to move forward with its piggy bank containing $300 to $500 million to invest in India see lack of clear land titles as the major hitch in its way.
Foreign funds have enough potential to buy ready to sell property but not all keep in track with their specifications. Moreover, there is no secondary market offering exit ways like real estate investment trusts, or real estate mutual funds.
For a foreign investor aiming to generate high quality returns on its investments, here are very few projects large enough to invest in. It means too much money is chasing too few deals.
All in all, I believe it is certainly going to be an uphill climb as well as an exciting journey for the foreign investors to get into real estate development in India. The battle to strive for the best has only just begun!!! :)CommentQuote0Flag