The great Indian opportunity

September 23, 2006	(1 votes, average: 4 out of 5)  Loading ...
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Dubai: For many decades, Indian entrepreneurs seeking to make their fortune looked to the UAE, eager to take advantage of its potential as a global trading hub.But in the past 12 months, a steady stream of investment has been flowing in the opposite direction. UAE-based property developers and retailers are keen to exploit India’s 8.1 per cent economic growth (2005-06), a booming real estate sector, and a wealthy middle class expected to constitute 30 per cent of the population by 2010.

Now companies in the UAE with Indian roots, including property developers ETA Star and luxury goods retailer Rivoli, are directing a considerable amount of their investment towards India.

ETA Star is developing a shopping mall in the heart of Chennai and a one million-square foot tech park in the city’s IT corridor. The company has already launched The Gardens, a 10-tower residential development in Bangalore, while in Mumbai’s Juhu district, it has entered into a joint venture development with the Supra Group to develop serviced apartments, residential buildings and a shopping mall.

“The company is also spreading its operation in cities including Kolkata and Hyderabad, where land acquisitions are in progress and projects will be announced early next year,” said Abid A. Junaid, ETA Star’s executive director.

Even property company Emaar, which has no historical links to the country, has invested heavily in India, following the formation of a joint-venture company with MGF Developments Limited.

In December 2005, Emaar MGF announced India’s largest foreign direct investment (FDI) in real estate, amounting to over half a billion dollars for projects with a capital outlay of $4 billion. Developments are planned in Delhi, Andhra Pradesh, Karnataka, Tamil Nadu and Maharashtra.

“With the country poised to maintain a seven per cent plus GDP growth over the next 20 years, the world is beating a path to India,” a company statement said.

According to Pranay Vakil, chairman of property experts Knight Frank India, the Indian real estate sector offers the highest investment returns of any country in the world.

He highlighted figures showing growth of FDI in real estate, which stood at 4.5 per cent in 2003 and surged to 18 per cent two years later.

The development of real estate has not escaped the attention of Ryan Mahoney, managing director of Better Homes, the UAE’s big-gest real estate agency, which is setting up six offices in Mumbai offering brokerage services for mainly residential property.

The company has already opened its head office in the city centre (Lower Parel), while secondary locations are on the way in wealthy Nariman Point in southern Mumbai, Vashi in the Eastern commuter zone, Malad West in the northern outskirts, Thane East and Pune.

“This is a turning point in the Indian economy FDI restrictions have been relaxed and real estate sector now offers tremendous potential,” he said.

Maloney said the population’s expectations of quality have “changed dramatically” to one where services provided by the thousands of local brokers do not meet requirements.

“For the last 30 to 40 years, if a consumer wanted to buy a property, he would have one choice, the local brokers. There was a real lack of choice and no transparency of information and this is what we are trying to change we want to professionalise the industry,” he said.

But opportunities are not restricted to property. According to Vakil at Knight Frank, the size of India’s retail market stands at $210 billion and is growing at between five and seven per cent per year. He added that FDI in single-brand retailing is now permitted and future reforms will allow FDI in multi-brand stores.

Sudir Kumar, executive director for property at Dubai-based Morison Consulting, said the opportunities in India are too good to miss, a fact demonstrated by visits to India by global business leaders including Bill Gates.

The GulfNews has clearly mentioned how the Indian realty sector is proving to be the foreign investors and realtors playground.

News Published Under:   Real Estate India |

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