India Business Insight, June 20, 2006 pNA
INDIA CALLING (residential real estate in India is likely to attract more than $50 billion of investments).
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(From India Business Insight)
The residential real estate sector in India is likely to attract more than $50 billion investments, of which foreign direct investments (FDIs) will account for $10 billion by 2015. There is a demand for 1.5 million houses every year in around 50 cities with a population of one million people.
Similarly, the commercial sector is expected to attract more than $1.5 billion every year to cater to the demand of 25-30 million square feet of new office space. Availability of commercial office space is estimated to cross 40 million square feet in 2006. At least $1 billion will be funded as FDIs since the Government has allowed 100-percent participation in the construction sector. FDIs are also allowed to invest in allotment of 25-acre land.
Tishman Speyer Properties have formed a joint venture with ICICI Venture Funds Management Company to develop real estate projects in India. Emaar Properties have also entered into a joint venture with MGF Developments to set up a $833-million integrated township in India.
Excess bureaucratic processes, limited lease tenures of commercial properties and absence of hybrid financial structures are some of the obstacles for FDIs.
