Indian Real Estate Boom Lures Foreign Investors

The real estate market in India is worth about $12 billion and is
growing at about 30 percent a year, Ernst & Young said in a report
last month commissioned by the Federation of Indian Chambers of Commerce
and Industry. Rising incomes, easy financing and population growth are
driving demand for housing and luring overseas investors.

India will have at least 50 property-related initial public offerings
in the next year as the real estate industry booms, according to Anish
Jhaveri, the head of equity sales at HSBC Holdings in India. "With
the opening of the real estate sector, there’s a lot of need for funds,"
Jhaveri said in a recent interview in Hong Kong. "The government
has been giving very proactive support to the whole sector."

Jhaveri said that venture capitalists and NRI investors were poised
to invest over $5 billion in the Indian real estate sector, without
providing more details. "People are seeking more clarity"
on possible changes to property regulations before investing, he said.

His forecast takes into account the possibility that India could allow
real estate investment trusts, or REITs, to invest in the nation’s property
industry. Still, of the 50 real estate related IPOs that he predicted
would take place in the next year, he only expected a "small"
number to be REITs.
In the past year, India had eight initial share offerings by engineering
and construction companies, which raised $478 million, according to
Bloomberg data. That compares with the six initial public offerings
raising $304 million in the previous 12-month period.

Indian billionaire Kushal Pal Singh’s real estate company, DLF Universal,
is seeking to revive the biggest Indian share sale once regulators decide
on a complaint by shareholders. The New Delhi-based company plans to
submit offer documents to regulators, paving the way for an offering
by early December, Saurabh Chawla, the finance vice president of DLF,
said in a phone interview Friday.

India is short of 20 million housing units, according to a study by
Housing Development Finance. That shortage will get worse, according
to UBS analysts, citing the growing population and increasing affluence.
Asia’s fourth-largest economy grew 8.9 percent in the three months to
June from a year earlier

Photo: Howrah Bridge, Kolkata, 1 April 2019-2 by Alexey Komarov, licensed under CC BY-SA 4.0, via Wikimedia Commons.