Global firms planning to invest in Indian Real Estate
Equity firms and International Property dealers from Singapore, Malaysia and West Asia and Asia are planning to invest in the Indian real estate market.
This interest of foreign players started being eminently visible when the Government became lenient on the foreign investment norms of the Indian real estate market. Certain Indian developers have started to chalk out business deals with foreign companies as well. These deals will be on hold only when FDI starts to take notice of this. This will not happen until 6 to 12 months from now, says a realty estate consultant.
It is said that the sector is guarding an inventory featuring both profit and loss along with cash crunch. The experts say that the FDI came into play at the correct nock of time. The Managing Director and South Asia Chairman of CBRE, Anshuman Magazine says that the infrastructure and real estate industry is craving for proper funding. Certain mid-range financial investors will be over-whelmed by this foreign affair announcement. It will initiate modern projects in the basic areas of metropolitan cities in mostly tier II cities and towns.
The Government has recently relaxed the FDI norms including cost relaxation in the minimum area of built-up to 20,000 SQ Metre, from 50,000 sq metres. The initial capital money is also reduced to $5 million, half of what it previously used to be. This government rule allows 100% FDI in real estate projects.
The main target of this Government is to improve the flow of FDI in this country. From 2000-2013, the Indian real estate had received FDI of around $22 billion. This is somewhat11% of the net foreign direct investment of the country in this time period.
The modified norms states that projects with minimum 60% FAR/FSI (floor area ratio/floor space index) for units per carpet area not beyond 60 sq metres will be held as affordable and proper housing projects. Even just 35% of the total units must be built with a net carpet area of 21 to 27 square metres for the sections that are economically weak.
Source:
Business Standard
Foreign Direct Investment in India, Foreign direct investments, foreign investment norms, Indian real estate market, International Property, Private equity firms, realty estate consultant
