New Delhi, September 21, 2006: Goldman Sachs CEO Brooks Entwistle has said that the company plans to invest $1 billion in India over the next two years. A key focus area of the investment would be real estate and infrastructure amongst other sectors. Mr. Entwistle was in India for the India Leadership Initiative conference in New Delhi. Mr. Entwistle said, "That's putting our own capital to work in this market."
Goldman Sachs terminated its joint venture with Kotak Mahindra Bank earlier this year signaling its intent to go it alone in this "very important market". Goldman has over 1,000 people working in India in Mumbai and Bangalore.
The Reserve Bank of India (RBI), India's central bank, has asked banks to include the national building code of the Bureau of Indian Standards into their loan policies. The BIS building code seeks to guide construction activities within the country to desired standards.
HDFC has got approval for a property fund that is to raise $720 million from overseas investors. The money will be raised through India Offshore Real Estate Investments, a Mauritius based entity. In addition, $30 million is planned to be raised from the domestic market.
Jones Lang LaSalle is to strengthen its India leadership team to deliver quality advice and services to a growing list of global, regional and local clients. The company, a leading global real estate services firm, announced strategic India management initiatives aimed at consolidating and strengthening its India operations. The initiatives specifically relate to establishing new leadership in the firm’s high-growth business areas in the country: Facility Management, Transaction Services and Project & Development Services.
You can count on continued strong demand for housing in India according to the National Housing Bank. For one, the market is flooded with liquidity thanks to a healthy economic growth rate, tax concessions and relatively low interest rates. Secondly, not only have realty funds made an entry for the first time, they now have about $4.7 billion chasing property investments. In addition to this there is a housing shortage estimated at 31.1 million units, especially in rural India.
Economic Think-tank NCAER has in its just released Quarterly Review of the Economy said that increasing interest rates on housing loans is unlikley to dampen demand for housing. There is a shortage of homes in every segment and with an overall trend of rising incomes, housing demand continues to be strong and housing prices are bound to rise.
Retailing in India continues to be a booming industry. The Indian retail sector has seen strong interest from global players as well as Indian companies particularly since the government opened the doors for FDI in single-brand retail in Feb this year. According to this year’s Global Retail Development Index by A.T. Kearney, India is positioned globally as the leading destination for retail investment.
The government has approved 105 special economic zone (SEZ) proposals of 388 applications received according to Minister of State for Commerce, Jairam Ramesh. In terms of the number of proposals Maharashtra has the most at 63, followed by Haryana -54, Andhra Pradesh -53, Karnataka -51 and Tamil Nadu -42.
See other SEZ News on INRnews.com
Indiareit, the real estate venture capital fund promoted by Piramal Enterprises, is to launch a $160 million offshore fund with a $40 million commitment by European private equity firm 3i. The fund will partner with developers in residential and commercial projects as well as SEZs.
The Goa Assembly was informed by Industries Minister Luizinho Faleiro that the Goa Industrial Development Corporation (GIDC) has allotted more than 11.8 million square metres of land for the development of a pharma park/Special Economic Zone at Keri and other biotech parks in the State.
Minister of State for Shipping, Road Transport and Highways, K H Muniyappa told the Rajya Sabha that Phase V of the Highways project that envisages a total of 6,500 km to be widened to six lanes is progressing on track. The estimated cost of this project is Rs. 42,000 crore. The project is being developed on the Private-Public Partnership model.
The Government has approved Singapore-based AAPC Hotels Management Pvt Ltd proposal for building a hotel at an investment of Rs 150 crores. AAPC hotels has formed a joint venture "Express Call Pvt Ltd" for this project.
Separately, the proposal of ILM Trichy (Mauritius) Ltd to fund the Trichy Tollway road project in Hyderabad at an investment of Rs 94 crores was also cleared based on the recommendations of the Foreign Investment Promotion Board (FIPB).
Home loans are very likely to cost more following the RBI rate hike earlier this week. RBI has increased its short term lending and borrowing rates by 0.25% while keeping long term rates unchanged.
An increased thrust on infrastructure spending has intensified the pressure on municipal corporations to augment their revenues. CRISIL estimates that municipal corporations will be required to contribute more than Rs. 300 billion over a seven-year period as their share of funds towards projects executed under the Jawaharlal Nehru National Urban Renewal Mission (NURM), Government of India's flagship scheme launched in December 2005. Generating funds of this order will require municipalities to look seriously and creatively at their revenue sources.
The booming retail sector in India is expected to grow at 7 per cent to 280 billion dollars by 2010-11 from the present 200 billion dollars, a report by Assocham said. The report on the future of the retail industry in India estimates the size of organized retail to grow from the current $6 billion to $17 billion in the next 4-5 years.
The retail boom is likely to have a significant impact on the commercial real estate sector as the large metros will have sizeable retail construction projects underway. The development of shopping malls in cities like Mumbai, Delhi, Chennai, Kolkata, Bangalore and Kanpur would be based on build, operate, lease and sell basis, which would lead to a close link between real estate developers, state governments, financial institutions and retail industry, the report said.
NEW DELHI, India,June 26, 2006--India's real estate investment market has grown rapidly over the past 18 months, and following the partial relaxation of Foreign Direct Investment (FDI) regulations in February 2005, the country is now attracting substantial interest from cross-border real estate investors. A World Winning Cities report titled "India: A Real Estate Investment Future," released by Jones Lang LaSalle underlines the attractiveness of the Indian realty as an investment opportunity, underpinned by a booming and increasingly diversified economy, significant potential for rapid expansion in FDI and a maturing real estate market.
Aerens Goldsouk International is to develop The company plans to develop 100 gold supermarkets in 100 cities across the country in the next 8-9 years. Land for 15 souks would be acquired by end of 2006 according to Gaurav Gupta, vice chairman and managing director of the company. This expansion would make the company a leader in development of specialised malls particularly focused on the jewellery industry.
The company had earlier launched Gold Souk, a jewellery mall in Gurgaon, New Delhi. Spread over 180,000 sq. ft. the Souk provides retail space to leading jewellers and also a complete shopping experience for consumers. After Gurgaon, new Souks are set to open in Kochi, Amritsar and Chennai in 2007.
Private equity firm Warburg Pincus is negotiating for several real estate investment opportunities in India according to its Managing Director in India, Rajesh Khanna. Quoted in the New York Times, he said "We see ourselves investing a few hundred million dollars in real estate in India over the next couple of years". In the last year, Warburg Pincus has dedicated a third of its resources in the country toward creating and evaluating real estate investment opportunities.
Writing in the Economic Times, Kiran Karnik President of Nasscom raises valid concerns about the the rapid development of SEZs and the need to ensure that the SEZ schemes get implemented right. Rather than focus on minimum requirements around exports, employment and investment, the criteria specified currently is on minimum land area. And this according to Mr. Karnik is likely to have the converse effect of maximising land acquisition by developers.
The Urban Infrastructure Opportunities Fund (UIOF) is a new fund floated by Anand Jain for investment in real estate and retail projects in India. The fund, with an initial corpus of Rs. 250 crores, will invest in housing, retail malls and multiplexes, IT parks and commercial property across the country.
Reliance Industries is investing Rs. 200 crores in UIOF. The fund opens for subscription soon and is targeting an initial corpus of Rs. 250 crores. The minimum investment limit is Rs 1 crore for individuals, Rs 2.5 crore for corporates and Rs 10 crore for banks and financial institutions.
Reserve Bank of India data indicates that the majority of the home loans (more than half) in India are in the Rs. 2-10 lakh range, followed by another 33% of loans in the Rs.10-25 lakh range.
In addition, there is also strong growth in borrowings of high amounts. Banks lent between Rs.50 lakh to Rs.25 crore as home loans to just 7,400 borrowers who borrowed a whopping Rs.8,600 crores. Another Rs.6,600 crores was lent to just 88 individual borrowers with an average loan size of Rs.75 crores.
The high-tech industry is significantly driving volumes and pushing up business across other sectors like real estate & construction according to Nasscom, the premier trade body and the chamber of commerce of the IT software and services industry in India.
In the current financial year, the IT/ITES sectors is likely to account for 8,900 hotel rooms per day compared to 7,000 rooms per day last year. This number could swell to 30,000 rooms per day by 2011/12. Similarly the IT/ITES sector is expected to account for an year-on-year`incremental' real estate and construction demand of 14.7 million square feet this fiscal, and this number could rise to 53.6 million square feet by 2011/12.