Realty may see consolidation: FICCI

MUMBAI: The Indian real estate sector is likely to experience consolidation wherein bigger players may opt for outright buy of smaller firms or forge joint venture or business alliances with them.

"Going forward, the Indian real estate sector may see a phase of consolidation in the industry.

The bigger players present domestically and with good project execution abilities and financial muscle, may go for either a full takeover or enter into joint ventures or business alliances with smaller developers in the sector," FICCI's Secretary General Amit Mitra said.

Mitra said that consolidation would actually be a good and healthy trend for the long-term growth of the sector and help in bringing higher transparency, discipline and stability in the market.

Stating that the global economic crisis has realigned the scale of real estate development activities in the country, Mitra said that many projects across the country have been either shelved or deferred due to the difficulty in arranging finance for the projects.

"Though the big developers having projects in the metros and at strategic locations are able to raise money from domestic and foreign sources, smaller developers are finding it extremely tough to raise funds for their projects," he said.