Latest Property News on 'FDI'

India’s small and medium enterprises welcome 100% FDI in single-brand retail

NEW DELHI: Welcoming the government’s decision to allow 100 per cent foreign direct investment in single-brand retail, India’s small and medium enterprises (SMEs) say the mandatory 30 percent sourcing from micro and small industries will help them achieve higher growth.

A Confederation of Indian Industry (CII) survey found that the SME industry, by and large, supported 100 per cent FDI in single-brand retail.

“The government’s decision of mandatory sourcing of a minimum of 30 per cent from Indian micro and small industry will help SMEs to achieve higher growth in sales, size of the industry, capacity addition, increased orders, qualitative improvements and branding of the products, technology upgradation, employment etc,” said the survey on the impact of FDI in retail on SMEs.

According to the survey, mandatory sourcing will provide for expansion of the scales of production facilitating domestic value addition in manufacturing, thereby creating a multiplier effect on employment, technology upgradation and income generation, demand and further investment.

The SMEs are also bullish about 51 per cent FDI in multi-brand retail and expect its earlier and speedier implementation would lead to the growth of organised retail.

“India’s growing retail boom is a success story. Fifty-one percent FDI in multi-brand retail and its early implementation would give a major boost to the all round growth of organized retail in the country having substantial positive impact on the growth of SMEs,” said Chandrajit Banerjee, director general, CII.

The CII survey was based on a large sample size covering different categories of SMEs according to sales turnover. This included companies with a turnover of Rs.25 lakh to Rs.1 crore, between Rs.1 crore to Rs.5 crore, Rs.5 crore to 25 crore and those having turnover between Rs.25 crore and 100 crore and above, from different regions of the country.

Asked how the SME industry considered the entry of MNC (multinational corporation) retailers, over 66 per cent of the respondents said it was an opportunity. Around 21 percent of them perceived it as a threat. About 12.5 per cent of respondents said the decision would have little or no impact on their businesses.

Over 98 per cent of the respondents said opening of the FDI in retail will augment growth of sales of their products. Of them, around 21 percent foresaw the growth of sales to escalate more than 20 per cent while 31 per cent expected the impact in the range of 10-20 percent.

Around 48 per cent of the respondents said the decision would have a positive impact whereas 35 per cent expected no change in the employment scenario.

Source: http://economictimes.indiatimes.com/news/news-by-industry/services/retailing/indias-small-and-medium-enterprises-welcome-100-fdi-in-single-brand-retail/articleshow/11651034.cms

India mulling infrastructure JV with Abu Dhabi investment arm

India is exploring the possibility of the Abu Dhabi Investment Authority (ADIA), one of the world’s largest sovereign funds to set up a joint venture with an Indian infrastructure institution — IDFC or ILFS — to make big ticket investments in the infrastructure space where the government has plans to invest US $1 trillion over the next five years.

India is also exploring if ADIA can invest directly in the infrastructure sector through a wholly owned subsidiary. The other opportunity being explored is for ADIA to contribute to the DMIC project implementation fund by way of debt or equity which is being set up as a trust. This will ensure nullifying investment risks.

The Gulf countries are diversifying their investments in emerging countries like India and China following economic problems in Europe and the US. The Abu Dhabi team’s visit is part of a series of engagements where the Gulf countries are exploring investments in India.

ADIA has expressed keen interest in investing in India. ADIA managing director Sheikh Hamed bin Zayed al Nahyan met Commerce & Industry Minister Anand Sharma to discuss the opportunities of investment in India. Both sides agreed to finalize a joint working group to expedite the process. “This is an opportunity to enter this huge market,” al Nahyan said.

Sharma said India planned to invest $1 trillion in infrastructure over the next five years and huge opportunities existed, including along the Delhi Mumbai industrial corridor.

Keeping in mind the worsening investment climate in developed nations both sides agreed that UAE and India should engage more. Sharma underlined the need to diversify the investment portfolio and proposed that 3-4 new areas must be identified for closer interaction like pharma, services sector and engineering along with agro processing.

The United Arab Emirates is India’s leading trading partner in the entire West Asia & North Africa (WANA) region, accounting for about 63% of India’s total trade with GCC countries in 2010-11. Bilateral trade has jumped over threefold in the last five years. Total trade in 2010 touched $60.3 billion. Bilateral trade between January to November 2011 was at $66.5 billion.

Source: http://www.tribuneindia.com/2012/20120117/biz.htm#6

‘Green’ touch for affordable housing

The International Finance Corporation (IFC) has decided in principle to support affordable housing in the Rs 5-7 lakh range for the Indian lower-middle and less-affluent segments.

IFC, which has embarked on a major initiative in the housing finance sector in India for the first time, is looking at supporting mass housing and ‘truly affordable housing’. Dovetailed with this initiative will be efforts to keep the housing projects that it will support in line with appropriate green building initiatives — environment-friendly, energy, water and other resources-efficient structures.

It plans to work with multiple agencies, including the government bodies and private sector players. IFC is also keen on supporting the private sector house builder, who is capable of delivering value housing, It will bring in the expertise that it has built up internationally, particularly in economies in Latin America and South East Asia, where it has solved the problem of affordable housing, despite high GDP growth rates that are driving up the costs.

The investment arm of WB is working with the National Housing Bank on a report for addressing country’s need for affordable and environment-friendly housing.

IFC will also address the regulatory side by working with the authorities concerned on the mandatory minimum standards of efficiency. It has built up experience in Indonesia and other countries, and is keen on bringing similar initiatives to India and China.

While the IFC will work with agencies such as the Bureau of Energy Efficiency, its focus will be more on working at the ground level with state-level agencies. It is keen for ‘traction at the ground level’. State governments in Rajasthan, Gujarat and Tamil Nadu are moving in the right direction, and can benefit from support in developing knowledge in human resources among the authorities.

It is looking at a line of financing that lays emphasis on green housing. IFC is talking to some developers in major cities to explore opportunities for direct financing of projects.

The IFC is also partnering with the National Housing Bank to set up a mortgage guarantee company, IMGC. This will be a Public-Private Partnership between NHB, IFC, Asian Development Bank and an international mortgage insurance holding company, Genworth Financial International Holdings, a part of the US-based Genworth Financial, a financial services company.

IMGC will provide credit risk coverage to residential mortgage lenders, to protect them in case of borrower default. IFC will invest Rs 80 crore during the next five years, to take up to 19 per cent equity stake in the company, to be headquartered in NCR, Delhi. — S.C. Dhall

Source: http://www.tribuneindia.com/2012/20120114/real.htm#2

Route thru retail?

Some believe that retail market opening to FDI could spell opportunity to realty players; but some just want to wait and see which way the wind blows before they put in their money

Property developers in India are eagerly waiting for the government to open up the retail sector. The recent pullback after proposing to open up the sector for foreign giants, owing to stiff political opposition, has cast a pall over the country’s commercial property market. If the retail market is completely thrown open to foreign direct investment (FDI), it would, say experts, throw up an unprecedented opportunity for property developers in tier-II and tier-III cities in the country. Even then, Wednesday’s official notification of 100 per cent FDI in single brand retail will open up the market.

“This can prove to be a game-changer,” says Pankaj Renjhen, managing director (retail services) of Jones Lang LaSalle India.

But will it lead to a boom in mall construction? Will it help property developers? Will the global retail giants go for a traditional revenue sharing model?

Vinod Rohera, director of K Raheja Corp, which set up Inorbit mall, believes that the pick-up in demand will be selective. “If FDI is allowed in the country, not necessarily all malls will witness demand. Only if the mall is up to mark in terms of logistics, will international brands opt for them. Malls that are weak fundamentally will not witness any demand,” he says.

On the supply side, Rohera said it would be extremely difficult for real estate developers to buy land at reasonable rates at prime locations. “Given the high cost of land acquisition and construction costs, supply won’t increase overnight. Retailers will also find it difficult to make money as developers will try to pass on the high input costs to retailers. Thus one has to wait and see how things shape up,” says Rohera

Lalit Kumar Jain, chairman and managing director of Kumar Urban Development, believes that the developers are unlikely to undertake mall construction if FDI is allowed in retail. “Big retailers like Carrefour or Wal-Mart will adopt a module where they or their Indian partners will construct the mall. There will be a few assets in good locations, which will be constructed by developers. There will be special purpose vehicles created by large mall operators with the retailers for construction of the mall,” says Jain. “It is too early to comment on the revenue sharing pattern,” says Jain.

The change in policy framework, as and when it happens, will definitely facilitate entry of large organised retailers into metro as well as big non-metro cities. It would have actually set in motion a chain reaction down the line, catalysing more demand from consumers, thereby, boosting demand for retail real estate development.

There is no doubt that these tier-II and tier-III cities and smaller towns in the districts remain by and large remain untapped. They hold huge potential for generating demand that international giants would find irresistible.

Though international retailers such as Wal-Mart and Metro are already operating in the country through the cash-and-carry model (aimed at wholesalers) including in smaller cities like Raipur and Ludhiana, the real picture will unfold with opening up of the retail market for them. Foreign retailers will seek to expand their businesses in metros and cities and gain the early-mover advantage. India will see a steady line-up of retailers in these cities over the next couple of years.

Most developers across the country feel that opening up of retail to FDI would do good to the real estate sector that is facing lots of hardships at present. Subir Das, COO of Avani Riverside Mall in Kolkata, told FC Build that opening up of FDI in retail would have given an impetus to retail real estate projects as the demand for such property would multiply. “Even existing retail properties would benefit from this. But now the much expected price growth for developer would be missed.”

According to Renjhen, international hypermarket chains such as Wal-Mart, Tesco and Carrefour, as well as national chains such as Big Bazaar and More will absorb the highest amount of retail real estate in tier-II and tier-III cities, as and when FDI in multi-brand retail in finally allowed. “Their first push will be into cities with population bases of one million or more. Though the spread will happen in all regions, there will not be any wholesale expansion, but growth will rather take place in clusters. The speed of the spread will be decided by how fast the required retail logistics and infrastructure can be put in.”

This would also have a cascading effect on residential property prices. A flourishing or an upcoming retail property gives fillip to the nearby residential property prices, which now looks unlikely. Also, opening up of FDI in retail would have initiated a new cycle of consumption because of creation of numerous job opportunities. “This job creation would have created a new demand for residential properties, primarily in the LIG (low income group) segment,” he said.

There is, however, difference of opinions on whether FDI in retail would significantly impact realty prices

Kumar Rajagopalan, CEO of Retailers Association of India, believes domestic retailers are capable of absorbing the properties being developed now. “When FDI opens up, there will be more demand for real estate. The slump in real estate prices is good for the retail industry. However, retail real estate is a small part of the real estate market, which is dominated by office and residential real estate. If demand for these remain subdued, retail demand itself will not push real estate up. FDI in retail will not dramatically impact real estate prices,” he said.

According to Mayank Saksena, managing director (country firm management) of Jones Lang LaSalle India, as and when FDI in retail is allowed, new players would come into play. “New players would mean new demand and new demand would necessitate more space. Paucity of space would push up prices.”

The positive impact of the FDI in retail may not be felt immediately in tier-II and tier-III cities. Initially, the development might be restricted to the metros. If everything goes right, it would take three to five years for the tier-II and tier-III cities for any benefit to trickle through, he clarifies. The growth, therefore, will happen in phases. This is because tier-II and tier-III cities are not at par in terms of demand and growth drivers, and there exists a great deal of variation in purchasing power and affluence levels of these markets.

Saksena explains why allowing FDI in retail would be (or would have been) good for the real estate sector. “The last economic recession had hit the sentiment of the realty sector hard. A number of retail players failed on their commitments, sending out wrong signals to the developers’ community. Things had reached a passé when developers were not too keen on taking up retail projects. The builders became too particular about sq ft calculations, return on investments, revenue sharing and so on. They were hardly getting good merchandise and without good merchandise it makes no sense to get into retail project,” he said.

Across the country, the investor sentiment has been impacted due to inflationary pressures and rising interest rates in the country coupled with the ongoing economic crisis in the euro zone and the US. In such a situation, opening up of the retail sector to FDI would mean lot of large organised sector players coming into play.

There are contrary views as well, though they remain a minority. In Kolkata, Ritwik Das, managing director of Blue Chip Projects, which has taken up a few retail property projects in West Bengal, refuses to believe that real estate players or developers, in particular, have any reason to be bullish about FDI in retail. “The way these large transnational retail players negotiate terms with builders does not help developers in any way. Builders don’t stand to gain much out of this. Even if some builders gain marginally out of this in some cases, the social impact of allowing FDI in retail would be much more telling and disastrous.”

A number of these international retail players like Wal-Mart or Bharti Wal-Mart in India prefer doing rental deals instead of sharing revenue with builders. “It would certainly go a long way in bringing back confidence of the developers,” says Saksena.

Probably, that would be the best bargain in the game.
Source: http://www.mydigitalfc.com/real-estate/route-thru-retail-898

Real Estate Firms Drop Overseas Plans, To Stay Grounded in India

Real estate companies, which started venturing overseas around 2006-07, are reviewing their global plans. With the slump in international realty markets, many domestic companies are either withdrawing from weak markets or putting their global plans on hold, reports Business Standard. Raheja Developers, for instance, has shelved plans to enter markets such as Mauritius and Colombo. Hiranandani Group, which has a major presence in Dubai, has changed its strategy. It’s stopped launching new projects, and is focusing on completing existing projects for other developers on a contractual basis. Omaxe has already exited Dubai.

Darshan Hiranandani, director and chief executive officer, Hircon International, a joint venture between the Hiranandani group and ETA Star, told Business Standard the company was not launching any new project in Dubai due to the slump. “Our strategy is to complete the incomplete projects for other developers on a contractual basis.” According to him, 23 Marina in Dubai, which was recently completed, has been sold out. However, the launch of Business Bay, which the company says ‘coming soon’ on its website, will not be for sometime. He was optimistic the market would recover soon.

But Nayan Raheja, director, Raheja Developers, is not so hopeful about prospects of the international market. The Dubai market would not recover, at least in the next five years, he said. “Nobody should be looking at the Dubai market as of today,” said Raheja. Raheja Developers, which was evaluating opportunities to enter Mauritius and Colombo, is giving it a miss in the wake of the global economic and realty gloom. “There is negative sentiment internationally. At this point, we are not even considering venturing out,” Raheja said. Tata Housing is one of the few companies looking overseas at this point. After establishing itself in the Maldives, the company is looking at Colombo in Sri Lanka.

Its managing director and chief executive, Brotin Banerjee, said, “We are confident of finalising a few projects in Sri Lanka this financial year — Colombo will be one of the locations. All these international projects are being planned through separate special purpose vehicles formed for each country or project.” Banerjee said the company was in the final stages of due diligence for two mixed-use development projects of two million square feet each in Colombo. Of this, one could be affordable housing. “With peace returning to the island nation, real estate will be a big growth story there,” Banerjee said. Tata Housing has earmarked Rs 1,000 crore for various ventures in 2011-12. “We work on a multi-city strategy and projects targeting all customer segments and hence, a slowdown in some geographies or customer segments does not adversely impact us,” said Banerjee.

Omaxe Group entered Dubai in 2007, with a goal of expanding in West Asia. But after investing Rs 50 crore (the first instalment of a Rs 1,600-crore project) through a joint venture with Dubai World’s property developer, Nakheel, Omaxe withdrew from the market due to a near lull. “We got the investment back, as Nakheel put the projects on hold indefinitely,” said Rohtas Goel, chairman and managing director, Omaxe. And now, the company has no plan of expanding outside India.
According to Sunil Dahiya, managing director of Vigneshswara Developers and vice-president of the National Real Estate Development Council, it is not just real estate developers, but also construction companies, which are withdrawing from the Gulf. “Indian companies in West Asia, especially into construction projects, are experiencing a near lull, as no major work is happening there. The contractors are not being paid,” he said. At least 10 to 15 construction companies present in the Gulf are suffering from the slump. Real estate consulting firm Cushman & Wakefield’s chief executive for Asia Pacific, Sanjay Verma, said, “For those over expanded, it would be a sensible move to focus on their core strength at this point.”

Source:http://www.realtyplusmag.com/rpnewsletter/Fullstory_Newsletter.asp?news_id=18086&cat_id=1

FDI in pension funds to source infra requirements: Assocham

FDI in pension fund management companies will further increase the volume of assets that can be invested in infrastructure. India needs one trillion dollars (about Rs 52 lakh crore) for infrastructure investments in 12th plan (2012- 17), Assocham said in a statement.

Allowing FDI in the pension sector would enable the country to raise the share of fund assets to GDP from current level of 5 per cent to 17 per cent. This in turn can result in assets worth $166 billion (about Rs 8.6 lakh crore), industry body Assocham said on Monday.

FDI in pension fund management companies will further increase the volume of assets that can be invested in infrastructure. India needs one trillion dollars (about Rs 52 lakh crore) for infrastructure investments in 12th plan (2012- 17), it said in a statement.

The global funded pensions market (both occupational and work related) is estimated at $24.6 trillion of which $16.2 trillion are held by pension funds. Permitting FDI in pension funds will give access to global pension fund companies to the vast untapped Indian market, Assocham in its study titled ‘Case for Allowing FDI in Pension Funds,’ said.

A 2.1 per cent allocation of total pension fund assets to India would increase its reserves to $342 billion – about the same in Brazil in 2010.

“Going by the world trends, equity allocation of these could be as high as $160 billion. A CAGR of 16.5 per cent as witnessed in Brazil will result in total pension assets of $734 billion of which equity will be $345 billion,” Assocham Secretary General D S Rawat, quoting the study, said.

Even if one-third of it goes into infrastructure development, it would mean an investment of over $100 billion – or one-tenth of total requirement in the 12th Plan period. At present, pension and insurance funds have a limited presence in the Indian markets due to regulatory restrictions.

In 2011-12, only 4.7 per cent of funding requirement – or Rs 13,289 crore – is likely to have come from pension and insurance funds compared to 10.5 per cent or Rs 29,851 crore from external commercial borrowings. The estimated debt requirement is to the tune of Rs 2.84 lakh crore in current fiscal and Rs 9.88 lakh crore in the 11th plan.

The government has introduced in Parliament the Pension Fund Regulatory and Development Authority (PFRDA) Bill which will pave the way for 26 per cent foreign investment in pension fund management companies.

The allocation of pension assets typically is 47 per cent in equity, 33 per cent in bonds, one per cent cash and the remaining in other areas. In India, 22.9 per cent could be in equity, 16.1 per cent in bonds and the rest in others.

If pension funds are diverted to infrastructure projects, they bring long-term income streams, stability, predictable cash flows, low default rates, project diversifications and societal benefits. “It is imperative that financial sector reforms continue to offer products and services for meeting financing and risk management needs of infrastructure projects,” said the ASSOCHAM study.

A vast majority of India’s population is not covered by any formal old-age income scheme and is dependent on their earnings or transfer from family members. The unorganised sector has no access to formal channels of old-age economic support. Only 12 per cent of the working population in India is covered by some form of retirement benefit.

The implications of demographic dynamics for pension planning become more evident when one takes into account the average life expectancy of 77 years which is likely to rise to 80 in the next three decades. The population above 60 years of age by 2030 will approach 200 million.

“Large-scale reforms are thus required to ease the pressure on treasury to provide for a social security net for growing number of senior citizens as well as growing workforce,” it said.

Source: http://profit.ndtv.com/News/Article/fdi-in-pension-funds-to-source-infra-requirements-assocham-295190

Policy focus should be on FDI

The government’s move to allow foreign retail investors to invest directly in equities is welcome, but only an incremental step to shore up capital inflows. Already, qualified financial investors ( QFI) including individuals, pension funds and trusts are allowed to invest up to $10 billion a year in the stock market through mutual funds instead of having to come through foreign institutional investors. So, allowing QFIs to directly own Indian stocks – each of them can own up to 5% in an Indian company but their cumulative investment is capped at 10% – is an incremental step.

It will open up another avenue for portfolio investment inflow, but does not guarantee such flows. Excessive dependence on foreign fund inflows only makes the stock market more volatile. Ideally, the government should encourage long-term domestic savings into the equities market. An institutional mechanism is already in place, with the National Pension System (NPS) that allows subscribers to invest in equities and generates superior returns. Workers should be allowed to voluntarily migrate to the NPS from the Employees Provident Fund Organisation (EPFO) that does not invest in stocks.

Two, the government should also enhance foreign direct investment rather than FII investment . It should resume talks with its allies and the Opposition to forge a consensus on FDI in retail and insurance. Last year, FII outflows were the highest from India compared to BRICs and emerging markets. According to EPFR Global that tracks foreign fund flows across markets , FIIs withdrew over $4 billion from India in 2011, against an inflow of $1.35 billion in 2010. Our stock markets have also been among the worst performers, with the BSE Sensex shedding close to 25% in 2011. However, market forecast will look up as the economy is expected to grow by 8-9 % in the medium to long term. So, easing curbs on investment makes sense. It should be backed up with sound macroeconomic management to restore confidence among foreign investors and also ensure that their returns are not eroded by a falling rupee. Reforms brook no delay, to contain and prioritise spending.

Source: http://economictimes.indiatimes.com/opinion/policy-focus-should-be-on-fdi/articleshow/11347045.cms

Morgan Stanley to invest Rs 600 crore in Mumbai projects

The global real estate fund of Morgan Stanley is in talks with Mumbai-based Sheth Developers to invest $100 million to $125 million (Rs 530 crore to Rs 600 crore) in a residential project in Mumbai. The Morgan Stanley fund will invest in the unlisted Indian firm’s project in the western suburbs of Mumbai, Business Standard reported, citing sources.Morgan Stanley declined to comment and Sheth Developers did not return phone calls seeking comment. Sheth Developers acquired an 18-acre land parcel in Andheri from Borosil Glass Works in 2010 for about Rs 875 crore and plans to develop a large residential project there, said the sources.

If completed, the investment would be the first in India by the Morgan Stanley fund in three years, two of the sources said. The fund has invested about $750 million so far in India. In October, sources told Reuters that a bunch of investors including a fund managed by Morgan Stanley and the Government of Singapore Investment Corp are in separate talks to buy a Mumbai property from Indian textiles firm Alok Industries for about $200 million (Rs 1,100 crore). Last month, the Wall Street bank named Shirish Godbole as the head of its global real estate investment fund in India.

Indian developers have come under pressure over the past year as rising interest rates deter residential buyers and funding for builders becomes scarce as economic growth slows.

Source:http://www.realtyplusmag.com/rpnewsletter/Fullstory_Newsletter.asp?news_id=17729&cat_id=1

Fresh Govt push for retail, civil aviation FDI

The government has not given up on liberalizing the foreign direct investment (FDI) regime despite suffering a setback on allowing foreign retail chains to set up shop in India. Within a week of announcing a pause on FDI in multi-brand retail, it is beginning fresh consultations with stakeholders, starting Tuesday, to get the plan back on track. To begin with, the food processing sector and small and medium enterprises are being consulted, with farmer groups and traders to follow.

Separately, the finance ministry is in talks with the Securities & Exchange Board of India (SEBI) to see how foreign airlines that acquire stakes in Indian carriers are not bogged down by the new Takeover Code in completing transactions. The new rules mandate that companies acquiring 25% or more in another entity have to make an open offer for an additional 20% stake. If the rules were to be applied to the civil aviation sector, then the FDI ceiling would be breached as the Manmohan Singh government is planning to allow foreign airlines to acquire up to 26% stake in Indian entities, which has hitherto been a taboo.

Sources said the issue is expected to be sorted out over the next few days as all ministries – including civil aviation that initially suggested a 24% cap – are now on board. If everything goes according to script, the government is planning to get Cabinet clearance soon after the winter session of Parliament ends.

The move, which is back in favour after a decade, is expected to ease the pressure on debt-laden airlines such as Vijay Mallya-promoted Kingfisher. While Indian airlines were earlier resisting the entry of overseas giants, they are the ones who are now keen on a partnership. Ditto for FDI in multi-brand retail where again, Indian promoters are now hoping that global chains will tie up with them and also ease the burden.

While a part of the discussion is aimed at getting feedback from the stakeholders, a major part of the exercise will focus on educating them about the advantages of allowing foreign retailers who are expected to bring in new technology to reduce wastage, generate jobs and help local vendors scale up to meet international standards. The discussions are also expected to focus on providing additional safeguards to protect local interests. Last week, the government had said it had decided to put the plan to allow 51% FDI in multi-brand retail on hold till a consensus was reached.

Source:http://timesofindia.indiatimes.com/business/india-business/Fresh-govt-push-for-retail-civil-aviation-FDI/articleshow/11088671.cms

India’s Kotak Realty fund raises $98 mln

Kotak Realty Fund, a unit of Kotak Mahindra Bank, said on Tuesday it raised 5.23 billion rupees ($98.2 million) from domestic investors for a fund that will mainly invest in high-yield debt instruments of real estate developers. The primary focus of the fund will be on residential projects, it said in a statement.

“The financing constraints facing the real estate sector will help provide the funds with attractive investment opportunities and we expect deal flow activity to remain robust,” said Vikas Chimakurthy, director at Kotak Realty Fund. Kotak Realty Fund currently manages about $700 million across five funds. Indian developers have come under pressure in recent months as rising interest rates deter buyers, even as it becomes more expensive for builders to access funds.

Private equity investment in Indian realty was marginally down in the first nine months of 2011 to about $784 million, from $817 million at the same time last year, according to data from industry tracker VCCircle.com. Domestic property-fund houses including Kotak Realty, and IndiaReit Fund Advisors, a fund backed by UK private-equity firm 3i Group, are in the process of raising about $1 billion in total, in a bet on the long-term case for property in Asia’s third-largest economy. ($1=53.3 Indian rupees)

Source:http://www.reuters.com/article/2011/12/13/kotak-fund-urgent-idUSL3E7ND2YC20111213