Real estate to sustain growth in 2007

A study conducted by Assocham said that the booming real estate market will gain momentum and is all set to attract foreign investment worth Rs 80 billion in 2007.

`The real estate boom of 2006 is set to multiply itself in 2007 to get India a foreign capital of over Rs 80 billion with leading international investors establishing their presence in the rewarding real estate development.

The chamber attributed factors such as strong economic growth, rising income levels, growing middle class, increasing urbanization and improving transparency for the resurgence in the real estate sector in 2006.

The realty sector would grow from USD 12 billion in 2005 to USD 90 billion by 2015, said Assocham.

In a bid to encash the booming Indian property market, global players such as Royal Indian Raj International, Blackstone, Goldman Sachs, Emmar Properties, Pegasus Realty, Citigroup Property, Lee Kim Tah Holdings, Salim group, Morgan Stanley and GE Commercial Finance are expected to bring substantial foreign capital into India.

Giving details about the foreign capital that is expected to come into the realty sector, Assocham said US-based investment bank Morgan Stanley has invested Rs 3 billion in the Bangalore-based Mantri Developers and plans to invest more than one billion dollars over the next 5 years.

Around 25 million non resident Indians (NRIs) are investing in immovable property in India, but unlike HNIs and financial institutions they are keen to invest in the housing segment, rather than commercial projects.

Global biggies such as Morgan Stanley, Lehman Brothers, HSBC and ABN Amro have queued up to pick up stake in local realty firms, it added.