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MENAFN - Khaleej Times - 24/11/2012

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(MENAFN - Khaleej Times) More than 50 builders across India are showcasing their properties at Times Realty India 2012, which concludes today at Sheraton Hotel " Corniche Road in Abu Dhabi.
The show is organised by The Times of India Group, in association with the Confederation of Real Estate Developers' Association of India, or Credai Kochi, which is showcasing projects in the south Indian state.

M.I. Sait, managing director of Mindscape Exhibitions, said India's real estate sector is expected to grow to a 180 billion industry by the year 2020 as per the Confederation of Indian Industries, or CII. With rising urban population and a growing economy driven by a growing services sector, the fundamentals for the growth of the Indian real estate industry are strong.

With the market opened up for foreign direct investment, or FDI, in 2005, several foreign and domestic funds have invested in the Indian real estate sector. Until 2010, nearly 27 per cent of all the private equity investments made in India were in the real estate and infrastructure sectors.

Traditionally, the Indian real estate industry was dominated by regional players with limited expertise and sources of funding. But today, various channels of financing are available to the sector. Also, the presence of foreign funds in the Indian market and strict regulation by the Reserve Bank of India, transparency levels have increased in this previously unorganised sector. This has also brought in the much required stream-lined approach towards construction and project delivery, Sait explained.

Commercial office space market in India is driven by the services sector. The office market has evolved significantly in the last decades. The total office stock in the seven major cities is pegged at 270 million sqft. Close to 55 million sqft of office space is under construction in the seven major cities in India and is expected to enter the market by 2013.

Mumbai and Delhi NCR have been the forerunners in the development of the organised retail real estate in India. These two cities account for more than 70 per cent of the retail stock in the country. Cities like Bangalore, Hyderabad, Chennai and Pune are now witnessing high activity in organised retail segment. Credai's participation at the show has lined up builders from Calicut, Kochi, Thrissur and Thiruvananthapuram.

The decline in value of rupee over the last one year is luring non-resident Indians, or NRIs, living in the UAE to buy property in India, said Sunil Kumar, chairman of the exhibition committee of Credai Kochi.

According to a survey, 89 per cent of non-resident Indians in the UAE are planning to leverage the power of their additional income by investing in properties worth up to Rs10 million and beyond. The weakening rupee gives more power to dirham currency that enables them to buy properties at a cheaper rate in India, it said.

"Property investments in India are believed to be the smartest move as chances of loss are negligible. The growth graph of the real estate sector is observed to be escalating day by day," said Kumar at a Press conference.

The rupee's depreciation against the dollar is a great attraction for NRIs to invest back home, so if a horizon of two to three years is kept, an average return of 25-30 per cent can be expected.

"In terms of location, other than metropolitans and Tier-1 cities, momentum of investment in Tier-2 and Tier-3 cities is quite high, plus the rate of appreciation is much more due to fast paced infrastructural developments. It is now more favourable to invest in Kerala's realty sector than before," said Kumar.


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