Political stability and a pro business environment have led to an uptick in foreign money flowing into the real estate sector, say industry players.
Rise in shareholding Listed companies such as Unitech, Oberoi Realty and Omaxe, among others, have seen a rise in foreign institutional investment as a percentage of the shareholding.
Shobhit Agarwal, Managing Director — Capital Markets, JLL India, said, “Foreign money that was sitting on the sidelines due to political instability has started to enter the country.” According to BSE data, Unitech has received FII money to the tune of around ₹85 crore (closing share price multiplied by percentage increase in FII holding multiplied by the number of total shares) during the April-June quarter.
Similarly, Omaxe has received around ₹9.44 crore FII money during the same period, while Indiabulls Real Estate has got ₹172 crore.
PE to exceed ₹12,000 cr In a recent report, global real estate consultancy firm Cushman & Wakefield estimates that private equity (PE) investment in the Indian real estate sector is likely to exceed ₹12,000 crore by the year-end.
Prashant Solomon, MD, Chintels India, and Member — Governing Council, CREDAI-NCR, says, “Real Estate Investment Trust or REIT, although allowed for only commercial properties, can be termed as a game changer in this respect. The announcement has triggered interest of foreign players to invest in India. The Government has also eased the norms for foreign investment in other sectors, which boosts India’s image as a whole. More foreign funds are likely to kick in for real estate too.”
In early August, the real estate investment arm of The Xander Group Inc invested ₹400 crore in a Gurgaon housing project of NCR-based Supertech Ltd. Xander, a global investment firm focused on infrastructure, hospitality, retail and real estate markets, has also put ₹100 crore in the Prateek Group. In April, it invested ₹370 crore in Kapstone Constructions, a group company of Mumbai-based developer Rustomjee.
“If the Government can deliver according to its promises, the Indian economy will see considerable improvement in the coming years. In such a case, there is high possibility of increase in foreign interest in the real estate sector,” Agarwal added.