Though the Indian economy was opened up
and liberalization was set in, Foreign Direct Investment in real estate was not
much encouraging. Foreign investors
preferred stock markets for investments.
Though there was much potential in real estate, the property laws of the
country and investment climate deterred the investors. The real estate is the mother of all sectorsand supports many industries. Even the Government
of India earlier restricted the foreign direct investment for political and
security reasons.
It is estimated that our
country will require $24 billion of investments in next five years and
development of real estate sector is vital for economic prosperity.
The previous government led by
Atal Bihari Vajpayee realised the importance of reality sector; further
liberalised the norms of FDI in township development, information technology
parks, special economic zones and hospitality sector. But many felt dilution of norms is half hearted. No doubt the new norms allow 100% FDI, but
certain restrictions like minimum block-in-period of three years before
repatriation of original investments and project completion stipulation that is
50% of the project should be completed within five years of possession of land
work as road blocks. As such there were
only few proposals in the beginning and later on FDI in reality swelled may be
owing to immense potential available in the country. Many foreign construction companies areseeking clearance for investment as the reality sector.
Apart from the available
potential there are other factors which have attracted FDI
A)
Increased
demand
B)
Improving
economy
C)
Availability
of housing loans at reduced interest rates
Confederation of Real Estate Developers of India (CREDAI) informs that the sector is set to witness capital
infusion of about $7 bullion next year; out of which $ 5 billion is from
foreign investors.
China is a serious competitor
to our country, as foreign investors prefer either China or India. But of late,
the investors are moving to India as they find that property sector in China is
reaching a point of saturation and as most of landed property there are
leasehold and owned by the Government.
Whereas in India the property is mostly freehold and potential is
huge. Our Bangalore scores over Mumbai as to the freehold land. Another
important factor is returns on investment in commercial or residential property
which are comparatively higher in India, particularly Bangalore. The chart below shows the returns on
investments.
CHART –I
City
|
Yield rates P.A.
|
|
Commercial (Offices)
|
Residential
|
|
Bangalore
|
11.0-12.0%
|
6.0-7.0%
|
Chennai
|
11.0-12.0%
|
3.5-5.0%
|
Delhi
|
7.5-9.5%
|
5.0-6.0%
|
Hyderabad
|
10.0-12.0%
|
6.0-8.0%
|
Kolkata
|
8.0-12.0%
|
5.5-7.0%
|
Mumbai
|
10.0-12.0%
|
5.0-7.0%
|
Beijing
|
9.6%
|
8.3%
|
Brisbane
|
7.0-8.0%
|
NA
|
Guangzhaou
|
9.0-10.0%
|
2.4%
|
Hong Kong
|
3.95%
|
3.75%
|
Many plots of sick and closed
industries are being developed into apartments, shopping complexes, and
recreation centres. The respective state
governments are also encouraging such developments as they earn more revenue
from such developed properties. Foreign
investors see a golden opportunity in investing in such developments, but
domestic builders, relators do not have resources to siege the chance. The following chart lists the major Foreign
Direct Investments in India. Bangalore
has the distinction of highest foreign direct investment. $791 million from
Canada based Royal Indian Raj International corporation for Royal Garden City,
a fully integrated township is coming up.
The total development will include 35,000 residential units with an
investment of approximately $2.9 billion and is scheduled to be completed by
2015 in various phases.
MAJOR FDIS IN INDIA
Dubai-based Emaar Group has invested $100 million in a township project in Hyderabad that includes a hotel and a golf course.
Jakarta-based Salim Group is to invest over $ 100 million in a 309-acre (124 hectares) township project in Kolkata. This Rs.500 million ($ 11 million) project will be developed as a joint venture between Salim Group and the Kolkata Municipal Development Authority.
High Point Rendel of UK, US-Based Edaw Ltd and Kikken Sekkel of Tokyo have teamed up to work on a township development project in Jharkhand.
Canada-based Royal Indian Raj International Corporation is coming up with $791 million for Royal Garden City, a fully integrated township in Bangalore. The total development will include 35,000 residential units with an investment of approximately $2.9 billion and is scheduled to be completed by 2015 in various phases. This is the highest FDI investment till date.
CESMA International Pvt. Ltd, a subsidiary of the Singapore government’s housing agency, alongwith the Andhra Pradesh State government, is promoting a township in Hyderabad.
Dubai-based Emaar Group has invested $100 million in a township project in Hyderabad that includes a hotel and a golf course.
Jakarta-based Salim Group is to invest over $ 100 million in a 309-acre (124 hectares) township project in Kolkata. This Rs.500 million ($ 11 million) project will be developed as a joint venture between Salim Group and the Kolkata Municipal Development Authority.
High Point Rendel of UK, US-Based Edaw Ltd and Kikken Sekkel of Tokyo have teamed up to work on a township development project in Jharkhand.
Canada-based Royal Indian Raj International Corporation is coming up with $791 million for Royal Garden City, a fully integrated township in Bangalore. The total development will include 35,000 residential units with an investment of approximately $2.9 billion and is scheduled to be completed by 2015 in various phases. This is the highest FDI investment till date.
CESMA International Pvt. Ltd, a subsidiary of the Singapore government’s housing agency, alongwith the Andhra Pradesh State government, is promoting a township in Hyderabad.
Lee
Kim Tah Holdings (a Singapore – based company) with an investment of
$115 million is developing a 100-acre mega township along with
commercial complex and related social infrastructure near Mumbai.
The Andhra Pradesh Housing Board has approved a 50- acre township in Vijayawada. CESMA International will construct houses and apartment blocks here.
Malaysian developer IJM is working on a township spread across 35 acres in Hyderabad near Hi-tech City.
The Andhra Pradesh Housing Board has approved a 50- acre township in Vijayawada. CESMA International will construct houses and apartment blocks here.
Malaysian developer IJM is working on a township spread across 35 acres in Hyderabad near Hi-tech City.
Ho-Hup construction Company Berhad is coming up with a 125-acre development project at Shamshabad in Hyderabad along with the Andhra Pradesh Housing Board.
SembCorp Engineers and Constructors Pte Ltd, Singapore, is working on eight projects in Mumbai, Pune and Bangalore. The company has invested $50 million.
Universal Success Enterprise Limited of Indonesia has signed a memorandum with Delhi-based developer Unitech Ltd for a $155-million information technology park and housing project in Kolkata.
Singapore’s fifth biggest property group, Keppel Land Ltd made its first foray into India after buying land in India’s Software capital Bangalore for $ 13 million. Keppel Land, which is partnering Purvankara Projects Ltd, is developing the first phase of condominium project located in an area known for high-tech campuses. It will be launched in early 2006.
Singapore-based Evan Lim & Co Pte Ltd is associated with a township development project in Visakhapatnam, Andhra Pradesh.
Uniworth Tranquil Row houses Area Range 1093 - 2506 sq.ft., Located at Kengeri, Bangalore available with 3BHK Row Houses.
Description:
Homes at Tranquil are set on memory lane, yet they are a benchmark for tomorrow’s homes. A contemporary way of living with features that are both sensitive to you and the environment.
Every home hosts a verdant sanctuary, a private garden. Your personal space to decorate as you desire. Ideal for small get-togethers, al-fresco dining or an afternoon siesta.
Rainwater harvesting serves as a self-sustained water source. Rainwater is collected in a central storage area, treated and reused. A resource-sensitive, eco-friendly system, it ensures Tranquil never has dry spells. Waste water treatment ensures every drop is conserved, while keeping Tranquil green. Solid and liquid waste is biologically and safely treated at a central treatment plant before being recycled to be used in the landscape and garden areas.
Every home hosts a verdant sanctuary, a private garden. Your personal space to decorate as you desire. Ideal for small get-togethers, al-fresco dining or an afternoon siesta.
Rainwater harvesting serves as a self-sustained water source. Rainwater is collected in a central storage area, treated and reused. A resource-sensitive, eco-friendly system, it ensures Tranquil never has dry spells. Waste water treatment ensures every drop is conserved, while keeping Tranquil green. Solid and liquid waste is biologically and safely treated at a central treatment plant before being recycled to be used in the landscape and garden areas.
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