The Indian real estate sector has always been perceived by investors across the world as attractive proposition in terms of quality assets across segments. The recent policy changes and reforms have further shaped the perception of global investors on India as these reforms are seen as India’s endeavour to given an image makeover to the real estate business.
Meraqi’s latest sector specific research report ‘Emerging Residential Niche Products’ reveals the potential of the growing alternate residential real estate market in India, analyses investment trends in niche categories like Student Housing, Micro units and Senior Housing emerging across the Tier I cities and forecasts the future trends in the segment.
When the market sentiments were bullish and foreign investors were testing the Indian realty market, many of the relatively not-so-polished developers started hiring these white collared professionals to negotiate with their global counterparts in a language that they understood. Problem started when this skilled workforce started colouring the vision of the promoter and hence driving the management decisions.
While, ATS has focused primarily on boutique and premium housing, HomeKraft would exclusively cater to the housing needs of affordable and mid income housing groups.
Track2Realty Exclusive: Analysts believe most capital in Indian real estate was invested at the exchange rate of around Rs 40-45 to a dollar with the expectation of 25 per cent returns. The currency depreciation has impacted the sector adversely as foreign investors would wait for the full cycle to play out and exchange rate to settle down before taking any fresh investment calls. Even if rupee comes down to below Rs. 60 an exit would mean a loss of around 30 per cent.
Track2Realty Exclusive: Tapping NRI money is a wish that kept the developers driving throughout the year with the depreciation in Indian rupee. However, any wishful thought of fall in the currency would be suicidal for the sector in the year ahead as this rupee depreciation would not benefit them as much with NRIs investment as it would affect the foreign private equity (PE) funds which have been the project rider for many of the developers.
Track2Realty: Total inflows in the real estate sector for the first quarter of 2014 were recorded at INR 2,800 crores (USD 460 million), witnessing an increase of 28% compared to the previous quarter and nearly 2.5 times the investment in Q1 2013, says Cushman & Wakefield’s report on private equity (PE) investments in real estate.
Track2Realty Exclusive: Funding, or rather lack of it, has been one of the key concerns of the real estate developers throughout 2013, yet if some of the key policy decisions that have been taken in the year it seems 2014 is all set to get big ticket funding. The money is poised to be invested in the sector and if not as private equity, the biggies will put in money through Real Estate Investment Trust (REIT).
Track2Realty: Office markets in India registered a downward trend in overall net absorption for the first three quarters of 2013, as per the latest report released by global real estate consultants, Cushman & Wakefield.
Track2Realty Exclusive: Why the US investors are shying away from investing in India? Primarily, it is the fear of change in policy as they had experienced in the past. Lack of significant growth is also another factor that is working against their investment in the Indian realty stocks.