Latest Property News on 'Foreign Direct Investment in India'

Kishore Gotety Appointed Country Head of Indian Real Estate by GIC

The Government of Singapore Investment Corporation (GIC) has hired Kishore Gotety, who was most recently at RREEF, as country head for India real estate. GIC confirmed the appointment of Gotety as head of real estate for India but declined to comment further. However, the hire suggests GIC believes the opportunity is ripe to start investing in real estate in India.

Gotety was earlier with RREEF Alternative Investments, the global alternative investments business of Deutsche Bank’s asset management division. Real estate is one of RREEF’s core businesses. Gotety joined RREEF at the end of 2007 as head of Deutsche Asset Management’s real estate and infrastructure investment advisory services in India and was widely expected to spearhead the firm’s expansion there.
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Consumer Affairs Ministry Gives Green Signal to 49% FDI in Multi-Brand Retail

The Consumer Affairs Ministry has given the green signal to allow 49 per cent FDI in multi-brand retail. It has written a letter to this effect to the Commerce Ministry. India currently allows 100 per cent FDI in cash-and-carry operation and 51 per cent in single-brand retailing. Foreign investors are barred from investing in multi-brand retail. Additionally, the Ministry also sought that a model law be first put in place at the State-level to protect mom-and-pop stores from the impact of the ‘Big Boys’ of retail.

“Multi-brand retail should be permitted with a cap of 49 per cent. A significant chunk of investments should be spent on back-end infrastructure, besides logistics and agro-processing,” the Consumer Affairs Ministry had said in response to the discussion paper floated by the Department of Industrial Policy and Promotion in June on allowing 100 per cent FDI in multi-brand retail. Read More »

Global Commercial Real Estate to Touch $300-bn Mark

Reflecting improved investor confidence, investment in commercial real estate globally is expected to witness a “healthy” growth of 40-50 per cent to $300 billion in the current year, says a report. According to the report by global real estate services firm Jones Lang LaSalle, the first half of 2010 saw investment worth $130 billion in the commercial real estate globally and is likely to touch $300 billion in the full year, representing an increase of 40-50 per cent from 2009.

“The first half of the year showed that confidence has improved and momentum has increased. While markets across the globe are strengthening, the last few weeks have shown that regional markets are moving with different dynamics,” the report noted. In the commercial real estate market, the quickest recovery was seen in the Asia Pacific. Europe lagged behind, where the investors still seem more hesitant, due to sovereign debt and austerity packages concerns, followed by the US, which had a slow start to 2010, but investment markets are picking up with the stabilised market fundamentals. Read More »

Amidst Global Uncertainty JP Morgan Positive on India

JP Morgan is positive on India despite the global environment being quite uncertain, JP Morgan Asset Management’s Investment Manager and India Country Specialist, Rukhshad Shroff, told reporters here. JP Morgan Asset Management is a leading global asset management company providing world-class investment solutions to clients. “We are positive on emerging markets. We remain very positive on India and if you take a slightly medium-term view, there are ample reasons to be cheerful and optimistic on the Indian market,” Shroff said.

India has achieved an eight per cent GDP growth despite the global economic uncertainty. The country also attracted FIIs inflow this calendar year of around $11-12-billion till date, in an extreme risk-averse global environment, he said. In the short-term, there may be volatility and hiccups but, generally speaking, “we have got all the ingredients for a reasonable market in place,” he said. Shroff pointed out that the BSE Sensex remained positive in 23 out of 31-years and gave 60 per cent returns in five-year period. It has given 30-60 per cent returns in 7- years and registered a 50 per cent decline in only one-year. Read More »

RBI Proposes changes in Private Bank Provisions- Makes it Difficult for Banks with Insurance Ventures to Attract FDI

In an indication of continuing differences over the new foreign direct investment policy, the central bank has proposed changes in the provisions relating to private banks that will make it difficult for them to attract foreign investment if they have insurance ventures. Also, private banks that have sizeable foreign investment will find it difficult to float insurance ventures with foreign partners.

The Reserve Bank of India has proposed that foreign direct investment, or FDI, proposals of private banks that have an insurance joint venture or subsidiary should seek approval of the RBI and insurance regulator IRDA. The central bank has suggested these changes to ensure that 26% foreign investment limit in insurance sector is not breached even indirectly. Read More »

Wal-Mart and Carrefour Ask Govt to Allow 51% Foreign Investment in Multi-Brand Retail

Two of the world’s top retailers, Wal-Mart and Carrefour, vying for a cut in India’s organized retail pie, have asked the government to allow up to 51 per cent foreign investment in multi-brand retail. India allows 51 per cent foreign direct investment (FDI) in single-brand retail and 100 per cent FDI in cash-and-carry or wholesale trading.

Wal-Mart has partnered Bharti Group to operate cash-and-carry wholesale stores and intends to continue the tie-up for multi-brand retailing. Bharti Wal-Mart believes that FDI in multi-brand retail should be permitted without any restrictions. They believe it will create conditions for greater flow of investments to the back-end with related benefits for farmers, small businesses and consumers.
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Govt to Allow Foreigners Set up LLP in Sectors where 100% FDI is Allowed

The government may soon allow foreigners to set up limited liability partnerships in sectors where 100% foreign investment is allowed, taking a decisive step after much flip-flop over funding guidelines for this form of business organisation, favoured globally for its flexibility.

The department of industrial policy and promotion (DIPP), the nodal agency for foreign investment policy, has written to the finance ministry giving the broad contours of the proposed foreign investment framework for LLPs. It has suggested that foreign investment be allowed in LLPs with prior approval. Read More »

FDI in India’s Booming Real Estate Jumps 80 Folds

It’s not Indians alone who are monitoring the real estate market here. More and more money is being pumped into India’s housing sector from abroad. And this, despite the recent downturn. Foreign direct investment (FDI) in India’s booming real estate and housing market jumped 80 times between 2005 and 2010. Figures obtained by TOI show that in 2005, FDI in real estate was a mere Rs 171 crore. That soared to Rs 13,586 crore in 2009-10. In April and May this year, Rs 737 crore in FDI was pumped into the sector.

It is no surprise that the largest number of building projects where FDI is in play are in the country’s commercial capital, Mumbai. Of the total 1,614 projects in which foreign investors have put in money since 2005, 422 were cleared by the Reserve Bank of India’s Mumbai office, followed closely by 316 in Delhi. Other big cities like Bangalore (225 projects), Hyderabad (105 projects) and Chennai (68 projects) also enjoyed considerable attention of foreign real estate developers. Read More »

Govt approves 12 FDI Proposals worth 23.06 Billion Rupees

The government has approved 12 foreign direct investment proposals worth 23.06 billion rupees ($ 500 million), said a finance ministry statement.
The Foreign Investment Promotion Board (FIPB), the nodal agency, said that it has deferred 15 foreign investment proposals including one from DLF Limitless Developers for transfer of shares to residents prior to expiry of 3 years from completion of capitalisation norms.

Relaince (ADAG) Set to Finalise Deal with Universal to Build $1.5 Billion Theme Park

The Reliance-Anil Dhirubhai Ambani Group (R-ADAG) is close to a deal with Universal Studios of the US to build a $1.5-billion, 400-acre theme park and resort. The company is scouting for locations at Mumbai and Delhi.

According to a report published in Business Standard, Reliance Big Entertainment and Universal, a unit of General Electric’s NBC Universal, could reach a deal this year. The talks have been on for over three months, while land is being looked for already.
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