Realty story: FDI skyscraper to grow $10b taller in H1

NEW DELHI: The boom in real estate is being complemented by an ever-increasing influx of funds. While more than 35 big-ticket foreign funds have already checked in, industry watchers are confident that the first half of 2007 will see at least 20 more funds making an India entry.

This would ensure another $10 billion addition to the FDI pie in the real estate sector. Experts say many Malaysian companies are also looking at entering India. According to industry estimates, nearly 90-100 real estate funds have already parked themselves in the country scouting for investment opportunities.

The Philippines-based Ayala, Dubai-based asset management firm Signature group, Och-Ziff Capital, EurIndia and Old Lane are some of the recent additions to the list of funds operating in India. “The India story has evinced interest from eminent global real estate business houses.

Though it is difficult to estimate the exact number of investors who could set up India operations in the next few months, a fresh $10-billion-plus FDI is in the offing,” said real estate consultancy Cushman & Wakefield executive director Sanjay Verma.

“Many Malaysian funds are looking at making sizeable investments in India. FDI from the UK is also likely to pick up in the next few months. Investors in the US, Israel and Singapore are equally keen to enter India,” said Ansal Properties and Infrastructure director Pranav Ansal.

According to UBS head of research Sanjay Bhatia, FII interest in the sector is also at an all-time high with 75-80 first-time investors in India. The Signature group is learnt to be close to launching several real estate funds for investment in the UAE and India, totalling over $650 million.

The funds are scheduled to be launched on the Dubai International Financial Exchange in the first quarter of 2007. Both Duetsche Asset Management and Actis have recruited key people in the sector to spearhead their real estate investments in India.

Merrill Lynch forecasts that the Indian realty sector will grow from $12 billion in 2005 to $90 billion by 2015. As of now, some of the prominent global funds that are aggressively investing in the sector include Carlyle, Blackstone, Morgan Stanley, Trikona and Warbus Pincus. Experts say they are sitting on a total corpus of $12-15 billion.

gaurie.mishra@timesgroup.com