INDIA PROPERTIES: May 2007

REIT Asset Management, a London-based company that manages real estate assets valued at over $6.8 billion globally, will partner a local developer to build nearly 5,000 flats on the northern and southern fringes of the city.

The project in Bonhooghly, opposite the Indian Statistical Institute (ISI), will involve redevelopment of a refugee colony. Around 800 families living there now will be given a flat each, free of cost.

The southern project at Maheshtala will be a fully commercial venture but the developers have promised to build a sports-cum-cultural centre for the municipality.

The cumulative project cost is an estimated Rs 465 crore. The two projects will be developed over two to four years.

David Cohen, the chairman of REIT Property Management India, told The Telegraph the projects are the beginning of what he believes will be “a long-standing relationship with the state and the city”.

“We are attracted by the opportunities in the state and look forward to be involved in more,” Cohen, who is now in France, said.

The company had set up office in India two years ago, but has invested only in one project in Pune so far.

“We are choosy. We looked at some 140 offers and selected three — two being in Calcutta,” Cohen said.

REIT will hold a majority stake in both projects with local partner Eden Realty Ventures, promoted by NRI businessman Indrajit De. “We are delighted to work with a global investor like REIT in Bengal,” De said from New York.

Both projects will have active participation from government departments. The Bonhooghly project will be a public-private partnership with the Refugee Relief and Rehabilitation Department of Bengal, while the Maheshtala Municipality will partner the other project.

In Bonhooghly, structures built in the ’50s to accommodate refugees will be pulled down. The displaced families will be given the flats in two years. Till then, each family will be given Rs 1,000 a month for temporary accommodation.

Of the 18 acres in Bonhooghly, 6 acres are earmarked for rehabilitation. The rest of the land will have 25 buildings, including 16 G+15 towers. Prices are expected to be in the range of Rs 10-22 lakh.

The Maheshtala project will have 44 buildings, including 30 G+15 towers, mostly for the middle-income group.

Source://telegraphindia.com

If the year 2006 marked some of the country’s biggest land deals, the future bets on India realty are set to usher in a gold rush. A study by the India Brand Equity Foundation (IBEF) suggests that the first half of 2007 will see at least 20 more funds making an entry into India. This translates into $10 billion of foreign direct investment in realty. In fact, the study indicates that India would be merely scratching the surface of the potential infrastructure opportunity with $191.51 billion of investments committed over the next five years. The sector is estimated to grow at a CAGR of 15% over the next few years . Merrill Lynch forecasts that the Indian realty sector will grow from $12 billion in 2005 to $90 billion by 2015. Prominent global funds including Carlyle, Blackstone, Morgan Stanley, Trikona and Warbus Pincus are sitting on a total corpus of $12-15 billion, say experts.

Eminent global real estate business houses like the Philippines-based Ayala, and Signature group, Och-Ziff Capital, EurIndia and Old Lane from Dubai are keen on sizeable investments into India . While FDI from the UK is also likely to pick up in the next few months, investors in the US, Israel, Malaysia and Singapore want to be a part of the India story.

Australian real estate consultancy major LJ Hooker, with 700 odd franchises in South East Asia, has opened its India account with a franchisee in Bangalore. US-based global investment bank Goldman Sachs and Unitech, the largest listed real estate company in India, will set up a special purpose vehicle (SPV) with a corpus of $208.7 million for investments in the real estate sector. DLF Ltd has forged a 50:50 joint venture with Nakheel, the largest property developer of the UAE, for two integrated townships in India at a whopping investment of $10 billion.