Foreign Funds Flood Indian Real Estate

With the Indian real estate market generating waves in global financial circles, Indiareit hopes to cash in on the investment mood of global equity players with the launch of an offshore fund.

The fund will raise USD 750 million for investment in real
estate projects in Mumbai, Bangalore, Pune and Hyderabad Individual and financial institutions from the US, Europe, Japan and
the South-East Asian countries are expected to make investments in the
fund.

Individuals can make investments for as low as USD 0.5 million, while
institutional buyers would have to make a minimum investment of USD
5 million.
Indiareit had raised USD 200 million from overseas investors in 2006,
and Rs.4.3 billion from the domestic market.

Europe’s largest private equity firm 3i Group had invested USD 40 million.

HDFC raised USD 800 million from overseas investors for its 9 year real estate fund last month, surpassing SUN Apollo Real Estate Fund’s raising of USD 630 million in January 2007.

Kotak Real Estate Fund is in the process of raising USD 350 million from
abroad, while IL&FS Investment Managers will generate Rs. 10 billion for projects in health, hospitality, commercial and residential projects

The Dubai Group is preparing to make large-scale investments
in Indian real estate, manufacturing and finance, following its study of the Indian market and its investment in the IPO of real estate developer DLF.

Setting aside USD 2.5 billion for investment in India and China, the investment
company has a portfolio of over USD 1 billion.

In 2006, the Dubai Group
purchased the Indian business of Thomas Cook, the travel and currency
exchange firm.