India Real Estate Information: Hilton, Moody's ICRA, Foriegn Investement

Weekly news updates on trends in the Indian real estate market

Studies by international property consultants clearly point to a booming real estate market in India and increased flow of foreign investments. Investors are evaluating Tier II and III cities as options. However, lack of transparency, poor regulatory norms and land acquisition issues continue to be issues to be addressed on priority. The Government of India and Reserve Bank of India differ on lock in period for FIIs in real estate IPOs and SEZs are marred in land acquisition controversies.

- Chillibreeze Business Research Team

June 8, 2007
Economic Times

DLF to bring Hilton brand to Kolkata
DLF is planning an investment of Rs 3,000 crore for developing two hotels and a service apartment in Kolkata. DLF has a tied up with Hilton hotels for its foray into hospitality sector.

June 8, 2007
Economic Times

Ascendas India announces Lim Sin Tiow as CEO
Lim Sin Tiow is the new Chief Executive Officer, Ascendas India. Mr. Lim takes over from Mr. Jonathan Yap, who is now CEO, India Funds.

Ascendas presently has seven projects in India: International Tech Park Bangalore, International Tech Park Chennai (ITPC) and Cyber Vale in Chennai, The V and Cyber Pearl in Hyderabad and International Tech Parks in Pune (ITPP) and Nagpur (ITPN). The company plans to focus on expansion providing quality business space in more Indian cities.

June 7, 2007
Moneycontrol.com

Dollar rush for Indian realty?
A recent report by global property consultant Jones Land Lasalle says that investments worth USD 30 billion are in the pipeline for Asian markets and India’s share could be USD 10 billion. Established markets like Delhi and Mumbai will remain preferred options for investment and new cities in focus include Kochi, Pune, Hyderabad and Kolkata.

The report states that India offers a return of about 20-25% on real estate investments. As per the report, the real estate share of total FDI in India is expected to reach 26% in 2007 as compared to 16% last year. 

Companies like Morgan Stanley, Citigroup Property Investors and JP Morgan have invested between USD 20-150 million in the Indian property market last year and several firms including Goldman Sachs and Blackstone Group are looking at investments in India.
 
June 7, 2007
Moneycontrol.com

India needs more reforms for REIT framework - Moody's-ICRA
A joint research paper by Moody's Investors Service and its Indian associate ICRA Ltd draws attention to the fact that India needs to put in place the regulatory and taxation framework for real estate investment trusts (REITs).

Based on market studies, the report states that the India real estate market is expected to grow to 90 billion USD by 2015 from 12 bilion USD in 2005

June 6, 2007
Forbes.com via AFX News Limited

Indian industrialist to build $1 billion “home” amidst Mumbai’s multimillion slum-dwellers
Mukesh Ambani has plans of building a a 27-storey skyscraper in Mumbai at a estimated cost of US$1 billion.

June 7, 2007
Asian Tribune

RBI wants lock-in for IPO allotments to FIIs
The Reserve Bank of India has recommended a three-year lock-in period be imposed on shares allotted to foreign institutional investors (FII) in initial public offers (IPOs) by real estate companies. The government is not in favour of the same.

The RBI is of the view that this would block speculative short-term foreign exchange inflows. Securities and Exchange Board of India (SEBI) is yet to notify the lock-in for FIIs. The RBI proposal does not refer to FII investments after shares of real estate companies are listed.

June 6, 2007
Business Standard

Where India offers long-term benefits
Those planning to invest in property in India need to be patient and have plans for long term investment returns.

Metros and happening cities are good for real estate buys. The new SEZs are still marred in land acquisition controversies.

June 6, 2007
Assetz® Property News Service