Vancouver, Canada (PressExposure) October 06, 2009 -- Realty developers say easier land acquisition and registration norms in states are the main reason for the spurt in investment.Some of the big projects likely to take off soon are the 10,000-acre special economic zone (SEZ) in Navi Mumbai, being built by the Hiranandani Group in association with the
Singapore-based Jurong Consultants, the $500 million Quarkcity in Mohali and the $3 billion Royal Garden project in Bangalore, being built by the Vancouver-based Royal Indian Raj International Corporation (RIRIC).
"The SEZ in Navi Mumbai, which will include residential houses and plots, an IT park and retail and commercial complexes, will see an investment of about $2 billion in the first phase. We are in talks with other foreign players and the project will get more funding after the first phase becomes operational in two years," Surindar Hiranandani, managing director of the Hiranandani Group, told Business Standard.
Other projects that are expecting funding include the $150 million IJM-Andhra Pradesh Housing Board project in Hyderabad, the $350 million IJM-Punjab Urban Development
Authority in Mohali and the $115 million Lee KimTah-SPICOT project in Chennai.As per the estimates of the Confederation of Real Estate Developers Association in India
(CREDAI), the total investment in the sector in the next 12 months can be around $5-6 billion.
"The investment trend is more towards residential and integrated township development.Nearly 50 per cent of the capital flow is towards these projects because of spiralling real estate prices and people investing more in property," a CREDAI spokesperson said.
However, despite foreign players having promised big funding, projects promoted by domestic developers are likely to materialise sooner. The move to allow 100 per cent foreign direct investment in projects that are over 100 acres has not made much of a headstart in the past two years.
The Foreign Investment Promotion Board has cleared only three such projects -- those promoted by Feedback Ventures - Malaysia Consortium, RIRIC and Lee Kim Tah. Only the
Lee Kim Tah - SIPCOT project has got a legal clearance. The $160 million Feedback Ventures project has been shelved after it got the FIPB's approval.
"We have decided not to go ahead with the project as property development is not our core competence. We will like to focus on our advisory role," Vinayak Chatterjee, chairman of Feedback Ventures, said.
Jones Lang Lasalle, consultant to the RIRIC project, said the land acquisition process was under way and it would take off only in the first quarter of 2005.
Domestic developers like Ansals have lined up Rs 200 crore for real estate projects. "We aim to invest 75 per cent of our corpus on residential properties in Jaipur, Panipat, Sonepat and Lucknow," Pranav Ansal, chairman of Ansal Township and Land Development, said.
DLF has planned to pump in Rs 1,500 crore next year on developing shopping malls but is shifting its focus to residential projects. "Although Rs 1,500 crore has been earmarked for mall development, this year the focus will be more on extension of existing residential projects," a DLF spokesperson said.
Others, like Unitech, Parsvanath and Raheja Group, will invest nearly Rs 1,000 crore next year. It is interesting to note that smaller developers, like the Gera group in Puna, Omaxe and Vatika in Delhi and Runwals in Mumbai, are betting big on the realty boom and have lined up over Rs 400 crore to be invested in the next 12 months.
Real estate fund Fire Capital will invest Rs 840 crore in a mixed use development project in the National Capital Region, a housing township in Bangalore and a housing and commercial project in Poona.