Foreign investors less keen on Indian real-estate

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Foreign investors are less willing to invest in Indian real estate . Some private equity funds looking to raise money abroad have even shelved fund raising plans, reports CNBC-TV18.

 

Ptarmigan Capital Fund, an India-dedicated fund launched by US-based Ptarmigan Capital LLC in March, could not raise funds from international investors. The fund has now been shelved. Analysts said that the plans to raise more than USD 2 billion have been put off indefinitely in the past six months alone. They said that while weak sentiment in the global realty sector has had its impact, the slowdown in the Indian property market has worsened the situation.

 

"In India, markets peaked and some crossed the line too early. At the same time, the government came down very heavily on the situation in India. Some of the funds were not able to convince investors that they are able to deploy funds and therefore secure investments were in a difficult position and not able to raise monies. There are a good number of those, who have not been able to do so," said Sanjay Dutt, Deputy MD, Cushman & Wakefield.

 

Analysts added that there are too many funds chasing too few good deals. So, funds have been slow in deploying capital and in turn this has affected their fund raising capabilities. They stated that worse affected are the third party funds, especially those launching a real estate fund for the first time.

 

Experts commented that funds with the first mover advantage, which have been successful in deploying the money they raised and show good return projections will be able to raise money. But they too will take longer to meet their targets than they did previously.