Global firms started discussions with Indian Developers for investment

Global firms started discussions with Indian Developers for investment

By siliconindia   |   Monday, November 24, 2014

Bangalore : Global property players and equity firms from Singapore, Malaysia and other countries of Asia and West Asia are considering the Indian real estate market, following a legislative move to relax norms of foreign direct investment in the real estate sector, including an etch in the minimum built-up area from 50,000 sq m to 20,000 sq m and reduction of initial capital value to $5 million.According to two independent consultants, many developers have started conversing with foreign enterprises for a conceivable undertake. One of the consultants said that “However, the deals are feasible to be struck only after 6-12 months; FDI won’t start impending immediately”.

The chief executive of a heading developer sited in Gurgaon affirmed that his company is conversing with numerous global investors for launching their projects. On condition of anonymity, the CEO said “We have received a few proposals and we are assessing those. Our only apprehension is that foreign investors wish for fixed returns over a period of time, which might be thorny, considering the circumstances of the real estate market”.

According to experts, the relaxation has come at the right instance, as the realty sector is perched on a despicable raise of inventory with cash crunch and low sales.Anshuman Magazine, CBRE’s South Asia Chairman, Managing Director said, “The genuine real estate and infrastructure sector is carnivorous of funds. This decree will amplify the base of investors, mainly mid-sized financial institutions. It will provoke new development projects in prime localities of large cities and tier II towns as well.”
JLL, a real estate consultancy firm, Chairman and Country Head Anuj Puri said, “The government’s resolution to relax FDI rules in the real estate sector literally comes in the nick of time for Indian real estate. For the moment, developers continue to reel under high levels of debt, even though the channels of grant have shrunk. The easier rules will aid in the completion of projects faster, which are delayed by a squeeze on funds due to elevated debt levels.”

The intention of government is to improve FDI inflows in the country. Amid 2000-2013, The Indian realty sector had received FDI of about $22 billion; almost 11% of the total FDI into the country. But succeeding a slowdown, foreign investment in the sector has slowed down from $3.1 billion in 2011-12 to $1.3 billion in 2012-13 and $1.2 billion in 2013-14. $446 million has flowed into the realty sector, during April-August of the current financial year.

Projects that consign 30 percent of the total cost for the affordable housing with a three year lock in period will be excused from the minimum built-up area and capitalization prerequisites. According to the norms, projects with 60 percent of floor area ratio for units of carpet area not exceeding 60 sq m will be considered economically weaker projects.

newly launched real estate project in bangalore

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