NRI Real Estate and Property Investment in India
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FDI upto $ 10 Billion in Indian Realty Expected
Thursday, May 31, 2007

Any fears of a real estate downturn can be set aside as foreign investors are waiting their turn to park their funds in the Indian property market. Going by in depth market analysis and worldwide trends, independent studies by international investors and global property managers have forecast foreign direct investment in real estate to reach USD 10 billion by the end of 2007.

With 35 foreign investors already established in the Indian realty market, another 20 are expected to enter in due course, says a study by the India Brand Equity Foundation. Carlyle, Blackstone, Warbus Pincus, Morgan Stanley, and Trikona are ready with funds worth USD 12 to 15 billion for investment in Indian realty.

Real estate giants from across the world, like the Ayala group from the Philippines, Signature Group, Och-Ziff Capital, EurIndia and Old Lane from Dubai are also eyeing the Indian realty sector.

Not to be left behind in the gold rush of sorts is L.J.Hooker from Australia, which operates through 700 plus franchises in South East Asia, and has, of late, tied up with a franchise partner in Bangalore. In the recent past, Nakheel of Dubai tied up with DLF for a joint venture in two township projects worth USD 10 billion. Goldman Sachs chose Unitech as its business partner with a committed investment of USD 208.7 million.

Real estate firm from Israel, Alony Hetz is ready with USD 100 million for investment in residential projects in Tier II and Tier III cities. Credit Suisse is working on a USD 1 billion fund for Indian realty, while Dawnay Day International of the UK would also invest in USD 1.5 billion over the next 2 years. High value property deals are spreading to cities other than Delhi, Mumbai and Bangalore.

In Chennai recently, an 11 acre plot of land was sold for USD 686.9 million to AIG Real Estate Fund and a 2.5 acre plot was sold for USD 40.3 million to Shyam Kothari.

Infrastructure development carries a vast potential for real estate developers, estimated to grow at a rate of 15% over the next 5 years. Merrill Lynch has projected the Indian realty sector to grow up to USD 90 billion by 2015. Experts expect further FDI to the tune of USD 400 to 500 million in the next few years in residential and commercial projects.

Related Readings :

NRIs to benefit from MOUs with UAE, Kuwait
FDI in India Projected to Double Over in 2007-08
Single cap for FDI, FII on the cards

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