Global Property Funds Bullish on Indian Realty

A significant drop can be apparently seen in property prices which is further a consequence of falling demand. Also, the bank finance is drying up and the market for real estate IPOs seem to have lost its potential. However, the situation is not as worst as it sounds to be.

There are high rolling foreign real estate majors that are
ready with their deep pockets to invest in Indian real estate.

An estimated investment of USD 1.5 billion has already been
committed and believed to0 cross the mark of USD 3 billion in
the current year which is substantially higher, says Sanjay Dutt,
Deputy MD, Cushman & Wakefield.

A multitude of property developers have largely invested in
development of land banks and do not have capital to execute
their pending projects.

With no bank debt, developers are facing
hard blows of crunched liquidity and uncertainty clouds their
plans.

However, the situation has certainly brought a gush of relief
for global investors.

The deals that were earlier looking to
be highly prohibitive are now looking affordable, says Aanandjit
Sunderaj, CIO, India Property Fund.

It is not just demand from builders that is pushing fund activity.

In the past two years, they have raised high amounts from investors,
the deals which are bringing healthy returns now.

The international funds who have earlier bought a whopping amount
of investments are still finding themselves unable to deploy.

The funds are now under pressure to set out funds as investors
are asking for their returns back.

Bigger funds are likely to roll in Indian real estate as the
property funds become a reality, and exit routes for these funds
look clearer.