Real Estate Sector in India is to have $1.5 Billion Additional Investment in 2010-11

Real estate sector in India is expected have $1.5 billion additional investment in 2010-11. In fact, the property sector in India is a Rs.70,000-crore industry and the new reported investment is in addition to this amount. This expected additional investment is a three-fold increase over that of the corresponding period of 2008-09. This will pump in much life-blood to the industry which has had a slump and stagnation for about 15 months in the wake of the global economic meltdown. The main collaborators of the additional fund are reportedly RedFort Capital, Xander Real Estate Partners, ICICI Prudential Infrastructure Fund, Sun Apollo and HDFC India Real Estate Fund. Most of these investments are expected to be in the metro centres and Tier 2 cities.

Of the additional $1.5 billion additional investment in the real estate sector in India in 2010-11, domestic contributors will put in to the tune of $400 million. The remaining fund of $1.2 billion is to come from international investors. In the words of Amit Goenka, national director, Kinght Frank Indian (P) Ltd: "These estimates are based on the total active domestic and international funds and their existing corpus strengths. There are some active domestic players like HDFC, ICICI Prudential Fund, IndiaREIT, Milestone and ASK who are expected to do deals in 2010. The bulk of the funds are, however, foreign, with much larger corpuses." Nagarjuna Constructions, Parsvanath, Godrej Properties and a few others have already struck deals with these fund investors.

In the context of real estate India,This sector has $1.5 billion additional investment in 2010-11, real estate groups in India like Emaar, MGF, Purvankara, Omaxe, Ambience, etc. are reported to be planning to enter in to private equity (PE) deals for their residential property projects. Some other real estate majors have announced qualified institutional placements (QIP) and initial public offerings (IPO). Reportedly, a number of Tier 2 developers in the Delhi NCR, Bangalore and MMR regions are in negotiations regarding PE funds for their residential units at various locations in the country. Most of the projects are located in metro centres such as Delhi NCR, Kolkata, Chennai, Mumbai, Bengaluru, Gurgaon, Ghaziabad, Faridabad, Pune, Hyderabad, Bhopal, Bhubeneswar, Jaipur, Lucknow, Goa, Chandigarh, etc. In the words of Abhishek Kiran Gupta, research head of the property consultants of global repute, Jones Lang LaSalle Meghraj (JLLM): "While abnormally large returns can be found in specific projects throughout the country, we have limited our analysis to India's seven largest cities due to high residential demand from their large populations, relatively higher transparency levels and presence of premium regional and national developers. In order to round out our top 10 list, we have also included three additional noteworthy cities which we feel have the potential to provide significant returns to investors."