Foreign Investors to Inject Billions into Indian Realty Market
Global real estate consultancy firm, Jones Lang LaSalle (JLL), has projected that foreign investors are preparing to invest approximately $4-5 billion into the Indian real estate market. JLL indicated that Bangalore, Delhi, and Mumbai continue to be the most attractive locations for this foreign investment.
Indian realty Market attracts more foreigners.
According to real estate consultants Jones Lang LaSalle, foreign investors are planning to infuse around $4-5 billion into India's real estate landscape. In an interview, Mr. Alastair Hughes, CEO at JLL Asia Pacific, stated that foreign investors are now demonstrating a keen interest in the Indian realty market.
"Indian realty market offers better returns to the investors." Mr. Hughes elaborated, reinforcing the attractiveness of the Indian market for global investors. He was in India for the World Economic Forum Annual Meeting. He pointed out that the investments will primarily focus on Bangalore, Delhi, and Mumbai, citing the potential for higher returns in these cities.
This renewed interest follows a previous period of foreign investment in India between 2006 and 2008. Those ventures proved unsuccessful, with investors exiting the market in 2009. Mr. Hughes attributed this earlier setback to a lack of experience in navigating the intricacies of the Indian business environment, coupled with the impact of the global economic crisis.
Indian realty market is all set to boom as more foreign investors will invest in the country.
Now, foreign investors are strategizing their return to the Indian subcontinent with renewed investment plans. The companies are actively seeking suitable partners to facilitate their re-entry into the Indian realty market. Mr. Hughes acknowledged the complexities of the Indian real estate business, characterizing it as particularly challenging to manage.
With the news of heightened foreign interest, Indian builders are also actively seeking foreign investors. Hughes noted that the current investment figures are significantly higher than those seen five years prior.
Between 2006 and 2012, approximately $14 billion flowed into the Indian realty market, averaging $1.2 billion annually over the last two years of that period. Roughly half of the total investments went into the housing segment, with one-fourth directed towards the commercial sector. The remaining 25% was distributed across other real estate sectors.
Mr. Hughes disclosed that the majority of the investment originates from the United States. However, he also highlighted substantial contributions from other regions including Germany, Hong Kong, the Middle East, Singapore, and the UK. He reiterated that Bangalore, Delhi, and Mumbai remain the preferred destinations for these international investors.