Indian Real Estate Market High on NRI Investment
The real estate story in India is reaching amazing levels of recognition as more and more foreign funds make an entry in India. An expected US$ 10 billion worth foreign direct investments (FDI) is envisaged for the Indian real estate sector. More than the trend of real estate rates being triggered from within, it is the pressure from Non-Resident Indians (NRIs) and global market players that is prophesizing the future of the real estate boom in India.
Real Estate has come on tops in terms of interest shown by overseas Indians.
Real Estate is attracting NRI investors not necessarily for speculative
purposes, but to acquire strong assets that will give good returns.
The most favourable route for NRI investments is to participate in a
variety of infrastructure projects like roads and bridges in urban areas,
construction of residential and commercial projects, development of
townships at city and regional level and investment in participatory
ventures.
The Real Estate rev up
Reinforcing the importance of such investments are the glorious opportunity-laden
times offered by the growing Real Estate market in India, amply supported
by the liberal investment policies of the Indian government at the Centre
and the States.
The lucrative segments of the Indian realty market are
open to global investors. The Indian government has opened the construction
and development sector for foreign direct investment.
Overseas Indian Facilitation Centre (OIFC) launched by the Ministry
of Overseas Indian Affairs (MOIA) has been set up to help overseas Indians
invest in India.
Residential prices have soared to more than Rs 5,000 per sq feet while
commercial prices are over Rs 10,000 in Tier I cities. Property
in Delhi is riveting enough to keep the average investor on his toes. Real Estate
is up for grabs in the domestic and international circuit due to the
city’s fast paced and ultra modern lifestyle.
The technology boom has led to the skyrocketing of prices. Tier I
cities like Bangalore, Delhi, Mumbai have registered a phenomenal growth
in the past decade with their effect cascading into the Tier II and
Tier III cities like Chandigarh, Gurgaon, Pune, Hyderabad, Mysore.
The
various lucrative avenues created to invite maximum investments from
abroad are being thoroughly appreciated.
NRI fund infusion in JVs
Malini Alles, a Silicon Valley billionaire has launched a Real Estate
$150m fund with a greenshoe option of another $100m to invest in the
Indian property market. Raj Vakharia, an entrepreneur from the U.S.
has announced the launch of a private equity fund that will invest $250m
worth of U.S. institutional capital into India’s real estate market.
NRIs in Qatar are showing keen willingness to invest here.
The anticipated launch of real estate investment trusts (REITs) when
operational in India would ensure their participation in investment
grade buildings. Currently, Indian REITs are making a foray into the
Singapore market.
Business Park developer has applied to the Monetary
Authority of Singapore to raise $357m to invest in integrated real estate
projects in India.
Pearl Global is venturing into real estate, tying up with Ansal Properties
to develop 9.26 acres of commercial land in Gurgaon.
In a joint venture
with two NRIs, Kolkata based Bengal Shrachi Housing Development has
announced the launch of a housing complex with fully furnished ready-to-move
in apartments in Rosedale Garden, designed to Non-Resident Indians (NRIs)
taste and preferences.
The joint venture has shelled out Rs 3 bn for
this mega project.
All this clearly throw a light on NRI interest and confidence in the
real estate market of India for safe and rewarding investments.
NRIs can fund investments through their own funds by using inward
remittance from overseas, income earned overseas or personal savings
outside India, or funds held in non-resident external (NRE) or non-resident
ordinary (NRO), or foreign currency (non-resident) (FCNR) bank account for purchasing Real
Estate in India.
Financial institutions and banks are forthcoming in financing their
requirements considering them a safe profile due to their good repayment
capacity.
Photo: Street Scene with Kids and Apartment Block – Fort District – Mumbai by Adam Jones from Kelowna, BC, Canada, licensed under CC BY-SA 2.0, via Wikimedia Commons.
