(1888PressRelease)
June 29, 2007 - India is a country that has "huge potential" as far as its property market is concerned, according to one delegate at the recent Real Estate Summit that was hosted by news agency Reuters in Singapore.
Seek Ngee Huat, president of GIC Real Estate, said his company is "trying to invest in India - we only pick the markets where we can do significant deals and India certainly has huge potential". His comments were echoed by Kurt Roeloffs of Deutsche Bank's property investment arm.
Mr Roeloffs said that his bank were impressed with the various aspects of the property boom that India is currently experiencing. He described the residential market as "a very strong story" with developers facing "a backlog of at least 20 million units" which they "are having problems keeping up with".
He added: "We also like the commercial story for outsourcing. It's bringing a lot of office demand to India, mostly happening in suburban nodes. As a result, we're going to see a lot of office demand on that front. More selectively we like the retail story in India … we're looking to invest in developers who have large land banks - it's early days in India and we're just going in."
Foreign investors have been ploughing money into Indian property in recent years and prices are shooting up all over the country. Most investment is restricted to the large urban centres such as Mumbai and New Delhi and as a result, property prices in major cities have doubled since 2005.
According to Reuters, the price of the average 100-square-metre Bangalore flat has risen by more than 50 per cent in two years and now stands at £50,000. The news agency reports that "prime residential prices" in the major cities of Mumbai and New Delhi are now just 20 per cent lower than Shanghai and 40 per cent below those of Singapore and Hong Kong - seemingly a large gap but one that has narrowed considerably in recent years.
Part of the attraction for the overseas investor may be the holiday homes market. The Indian government recently relaxed rules regarding foreign investment and has also been engaged in a campaign to push the attractions of India as a tourist destination. Millions of pounds have been spent on the Amazing India campaign and the Indian tourist minister has recently pledged more money to promote package holiday trade.
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