Luxury apartments and villas are the hot property of the season. This trend has further accelerated the growth of real estate in India. Has the current boom in Indian real estate opened doors for overseas investment? If so, what’s in the offing?
With the Indian real estate market doing roaring business, realty developers are constantly innovating to provide the best your money can buy. Moving away from livable accommodation with modest interiors, the concept of high-end apartments is now gaining popularity in India.
The accelerating economy fueled by progressive IT growth has not only paved the way for commercial infrastructure but has also helped realty developers to introduce a new class of residences specially carved out for super rich professionals. This newfound consumerism has led to increased purchasing, as today’s consumer is willing to spend more to get the best. With the demand for quality housing setting in, independent villas and luxury apartments are the hot property of the season. They have redefined the face of housing in India.
What is so special about these high-end apartments?
A high-end apartment is usually – in real estate jargon – a 3 BHK (bedroom/hall/kitchen) apartment with picture-perfect surroundings, advanced security systems, servant’s quarters, central air-conditioning, ample parking space, roof gardens and proximity to the city centre.
The growing market in India presents clear opportunities to live and work here and NRIs no longer want to look at property merely as an investment option. First or second generation NRIs wishing to return to their homeland especially prefer to live in such sophisticated apartments with the state-of-art facilities that were not available a few years ago.
Why is India the hub for global biggies?
Some of the main factors that attract foreign investment in Indian real estate are:
To facilitate enhanced growth, the Indian government has been encouraging foreign investment. The 100% FDI in real estate has instilled confidence in overseas investors who are now closely looking at the market. According to industry sources, over 90 foreign investors have already invested in Indian realty.
Some of the big names include the Blackstone Group, Goldman Sachs, Morgan Stanley, Columbia Endowment Fund, Tishman Speyer and GE Commercial Finance Real Estate.
While property markets in the US and UK are reaching saturation, real estate in India, China and the Middle East is growing at a fast pace. The property boom is touching new heights, making it the most lucrative business today. According to Merrill Lynch the Indian realty sector will grow to $90 billion by 2015.
Very soon Mumbai’s skyline will share the sophisticated look of the high rises in Manhattan. US-based real estate tycoon Donald Trump is planning to invest in the Indian property market in the next 18 months. His luxury residential apartments, Trump Towers, will attract high net worth individual investors in Mumbai and Delhi.
Also among the major investors is the world’s largest listed real estate developer Emaar Properties that is presently building the world’s tallest tower in Dubai. Emaar has invested $500 million in an Indian joint venture.
However, a few foreign companies are still testing the waters, as infrastructure seems to be a major concern. That partly explains why these firms hesitate to start off on their own but look out for Indian partners.
With a rapidly developing Indian economy on the one hand and high returns from the property market on the other, is India becoming the one-stop destination for overseas real estate developers? Are they equipped to cope with the bureaucratic wrangles and underhand deals that this sector is often involved in?