In response to a continuing downturn in the domestic real estate market, property firms are increasingly targeting new overseas markets for business expansion. Although the trend of looking abroad is not entirely novel, companies like Puravankara Projects Ltd, hailing from Bangalore, along with Sobha Developers Ltd, as well as Delhi-based Parsvnath Developers Ltd, are aggressively pushing their global outreach.
Having overseas offices can prove beneficial in various ways. For example, a base in the United States could enable them to seek additional private equity funding; in China, it might facilitate access to more affordable construction materials; while Singapore and Australia potentially offer new buyers and investors respectively. Moreover, Indian developers are setting their sights on nations such as Sri Lanka and Malaysia to explore available properties.
PRA Realty, a Pune-based property developer, is committing nearly $100 million (approximately Rs432 crore) towards three township projects located in Nagpur, Pune, and Nashik. This company has established an office in Chicago, appointing a new chief financial officer (CFO) there. "The idea is to interact with US-based funds there, raise capital and explore business opportunities," stated Rustom Bharucha, the managing director (MD) of PRA Realty, which also operates a marketing office in Dubai.
Historically, Indian developers have primarily set up marketing and sales offices in the UAE, particularly within Dubai, as demonstrated by builders like Hircon Llc, Ajmera Housing, and more recently, Omaxe. However, developers like Parsvnath, Lodha Group, Sobha, and Puravankara are venturing into newer territories, targeting places in South-East Asia, China, and traditionally favorable areas such as the UK and US.
Sobha has established an office in Guandong, southern China, from which it sources much of its raw materials and interior fittings, including tiles and silicate boards used in bathrooms. In 2007 alone, Sobha estimated that it imported materials worth Rs2.5 crore from China—a figure that is anticipated to escalate significantly. "As a company expands across cities, it’s crucial to have an international presence so that people are aware of your products. We plan to open offices in Australia and Singapore, in addition to the US and UK in the foreseeable future," asserted J.C. Sharma, executive director of Sobha. The firm is also progressing within India, launching new projects in Pune, Coimbatore, Kerala, and Mysore.
Parsvnath, on the other hand, is in discussions with a Singapore-based real estate firm to pursue a joint venture focused on hospitality and real estate. The Indian developer has successfully established a subsidiary for its Singapore operations, termed Parsvnath Developers Pte Ltd, and intends to open offices in Singapore soon. The firm anticipates launching at least one five-star hotel there. "We are in talks with real estate firms for partnerships," remarked Pradeep Jain, chairman of Parsvnath, during a press conference announcing its fourth quarter results. "The Singapore market is remarkably transparent and organized, with profit margins nearly equivalent to those in India."
Moreover, Puravankara has opened an office in Sri Lanka, with plans to introduce a luxurious villa project comprising 300 units on 26 acres near Colombo. "We are in the final stages of obtaining approvals for this project. Additionally, we have appointed representatives in the UK and US," noted Ravi Ramu, CFO of Puravankara.
According to a recent report by Jones Lang LaSalle Meghraj, a global real estate consultant, non-resident Indians (NRIs) account for 15–25% of all new residential developments in India, contingent upon the project and its location. While NRIs from the UK, Canada, and Dubai have historically invested in the Indian real estate market, there is a growing trend of buyers from Singapore, Hong Kong, and Thailand beginning to purchase properties in India, explained Raminder Grover, managing director of Homebay Residential, a subsidiary of Jones Lang LaSalle Meghraj.