Dollar rush for Indian realty?

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A study reveals that in the next couple of years India's real estate sector could see investments of more than USD 10 billion through the FDI route.

 

Investments worth USD 30 billion are in the pipeline for Asian real estate market this year. Out of this, USD 6 billion have been planned for India alone, says a report by leading property consultant Jones Lang LaSalle.

 

India offers a return of about 20-25% on real estate investments. Attractive returns could further increase India's share in the total investments expected in Asia this year, the report says.

 

As per the report, the real estate share of total FDI in India is expected to reach 26% in 2007 as compared to 16% last year. Last year saw companies like Morgan Stanley , Citigroup Property Investors and JP Morgan investing between USD 20-150 million in the Indian property market.

 

A strong response was received from  West Asian investors like the Nakheel Group , which recently tied up with DLF . With more than a dozen other firms, including Goldman Sachs and Blackstone Group , eyeing the Indian real estate market there could be more money coming in.

 

Vincent Lottefier , Country Head-India, Jones Lang LaSalle,  says, "We expect, over the next 24 months, an excess of USD 10-12 billion of investments into India. The reasons being, India is one of the most attractive markets. Growth from the IT ,  retail , and  residential sector are optimistic."

 

High rental, capital value appreciation and the availability of quality supply also attracts foreign investors, the report says, adding that most capital investments are used for residential and mixed-use projects.

 

Though foreign investors would rather invest in established markets like Delhi and Mumbai  at present, the report says, as these markets mature, smaller cities like Kochi , Pune , Hyderabad and Kolkata will emerge as preferred investment destinations .