India to witness more Foreign Direct Invesment inflows into the realty sector

| The Dollar Business “The recent move by the Indian Government like reduction in the number of documents for imports and exports and continued focus on ‘ease of doing business’ will augur well for the inflow of FDI (Foreign Direct Investment) into the Indian real estate,” said C Shekar Reddy, National President, The Confederation of Real Estate Developers Associations of India. Speaking to The Dollar Business, Reddy said the PPP (Public Private Partnership) model followed by the Government and its intention to generate Rs 70,000 crore through infrastructure bonds will attract FDI too and the industry might see the investments surge up to $7.5 billion for the year 2015, against $5 billion in 2014. For 2014, the percentage ratio between FDI and domestic investments stood at 38:62 respectively, but for 2015, it might jump to 42:58, Reddy opined. Reddy said, “We have been asking the government to help builders develop real estate properties more in line with the ‘plug-n-play’ concept as it would help enhance India’s position as a global information and outsourcing hub, as these will help boost corporate investments transactions either for office space or for development to end-use customers. This will pave way for an increase in private equity investments also.” With the Smart City initiative, India is already into the process of boosting the infrastructure sector by allowing construction projects on a larger scale. To this effect, the Union Urban Development Ministry of India had also called for fast approval of procedures with respect to the construction projects and pitched for completion of clearances within a period of 30 days. We are eagerly waiting for the National Building Code-2015 and hope it would be finalised by September 2015. The new code will boost the infrastructure sector on a larger scale, by enabling single window clearance for construction projects, Reddy added. A recently released report by global property consultant Cushman & Wakefield (C&W) said that India at the 20th rank recorded the third highest growth in investments, with an increase of 140 per cent in the total investment volumes in 2014 at $5,050 million, compared with $2,100 million in the previous year. Of the total investment volume, the domestic investments were $3,120 million (62 per cent) and foreign $1,930 million (38 per cent). The Indian real estate investment scenario saw a high point in 2014, reaching highest investment levels in the past five years, the C&W said in its report ‘International Investment Atlas 2015’.  

 This article was published on March 16, 2015.