Foreign builders bullish on Indian realty market

Despite the slowdown in real estate market in India, foreign developers are still bullish on investing in Indian property market.

Chinese property developer Dalian Wanda Group, signed a memorandum of understanding (MoU) earlier this year with the northern state of Haryana to develop ‘Wanda Industrial New City’. The company is planning to invest $10 billion in the next ten years in India to construct industrial townships, retail and residential developments. The construction of the phase-I of ‘Wanda Industrial New City’ is likely to begin in 2016 and it will be spread over 1,300 hectares.

Another Chinese developer China Fortune Land Development Company Private has also joined hands with Haryana state to develop large format industrial parks in the state. Also, Gezhouba, another prominent Chinese construction company, has in-principle agreed to invest Rs 10,000 crore in irrigation projects in Telangana state.

“It will be interesting to see if larger deals are signed in 2016. With China experiencing a slowdown in their own economy, the developers there will get an opportunity to benefit from India’s growth story. The Wanda investment will be one of its biggest, so far. It is also bigger than most deals that other Chinese companies investing abroad carried out in 2015,” said Anuj Puri, chairman and Country head, JLL India.

Even for the Indian industry, it will be among the biggest investments in the residential and retail asset classes by a foreign developer. According to JLL, increased participation by foreign players is expected to help in the development of quality projects, which will benefit end-users and simultaneously create opportunities for Indian investors too.

“It will be interesting to observe the implications of Wanda’s strategy and the innovations such foreign players bring to India as they compete with local players to capitalise on the opportunities that India gives them now. Foreign developers are also going to look at partnering with their Indian counterparts. Interestingly, large residential projects are of particular interest to other Chinese developers. It remains to be seen if commercial asset class also gets on their radar in the near future, ” Puri added.

Apart from Chinese developers, Japanese and Chinese private equity investors are also looking at entering India’s real estate sector. Japanese developers are keen to explore strategic partnerships and enter into joint ventures with Indian builders, and are particularly interested in industrial projects. There is likely to be an inflow of at least $ 2 billion investments from Japan into the Indian real estate market over the next three years.

Other foreign players like Philippe Starck and Trump Real Estate has already entered in Indian real estate market by launching luxury residential projects.

Credits Business Standard

Leave a Reply

Your email address will not be published. Required fields are marked *