Realty sector

Foreign firms eager to get a share of the increasing demand for office space and housing. Therefore Global players are keen to pump in as much as $ 6 billion in India Realty sector.

Indian realty market is truly rocking. Not only because it offers maximum returns to investors but also because, an industry body has predicted, global players are increasingly getting interested in the sector, particularly in office space for IT-enabled services & BPO centers.

Leading international investors like Royal Indian Raj International, Blackstone Group, Goldman Sachs, Emmar Properties, Pegasus Realty, Citigroup Property Investors, Lee Kim Tah Holdings, Salim group, Morgan Stanley and GE Commercial Finance Real Estate are showing keen interest and establishing their presence in the Indian real estate business.

Assocham, in an analysis titled ‘Future of Real Estate Investment in India’, said these firms have plans to invest $2.9 billion, $1 billion , $1 billion, $800 million, $ 150 million, $125 million, $115 million, $100 million, $70 million and $63 million in India, respectively.

Prices to rise even more

The foreign firms’ interest can further make the market pricey.

In fact, it is estimated that the share of foreign direct investment (FDI) in Indian real estate market will shoot up by at least 10% to touch about 26% by this fiscal.

Overseas investments will also find a large space in the upcoming special economic zones (SEZ) and the increasing number of shopping malls.

While the real estate market is growing at 30% annually and offering maximum returns to investors, the industry body projected that this $16-billion sector is expected to touch $60 billion by the year 2010.

Of this, the share of foreign investments will be in the range of $25-28 billion in the next four years.

Office Space, Housing to drive Growth

It is indicated that the requirement for office spaces alone would grow over 19 million square feet in 2006-07 from 4 million in 1999-2000.

About 75% of the demand will be needed by IT & BPO sectors alone. By 2010, the total demand would rise to a whopping 200 million square feet of office space in major Indian cities.

India will also have a demand-supply gap of 17.9 million housing units by 2010. Capital values in residential sector have risen by about 25-40 % per annum in the last 2-3years.

250 more Malls By 2010

A report on Indian Realty Sector forecasted that the number of malls in Mumbai, Kolkata, Bangalore, New Delhi, Hyderabad and Pune will grow to 300 in number by 2010 as against their current strength of 50. In terms of total area, there was 12.40 million square feet of mall space available in these cities.

Therefore considering the above statistics and potential it is not a surprise if foreign companies are willing to pour in billions of dollars to invest in Indian Realty sector.