Private equity in real estate market to grow up to $ 3 bn in 2 years

Q: The real estate private equity market inflows which stood at around $1-1.5 billion per annum over the last few years, is likely to double in the next two years due to the relaxation of FDI norms.

Ashish Sharma, Mumbai

12th December 2014

Real estate News in Mumbai

private equity

fdi

fdi in construction

fdi norms

relaxation of fdi norms

equity market

realty market in mumbai

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Replies (6)

Yes Anuj,
Allowing 100% FDI automatic route in completed project for operation and management of not only townships but also shopping complexes and business centres, will enable developers to sell completed malls and integrated townships to foreign investors. This will significantly increase the volume of the retail real estate business. Am i right or not?

Ashish Sharma, Mumbai

12th December 2014

Comment

Yes Ashish,
This new exit feature correctly acknowledge that the successful expansion of such infrastructure is a major landmark point in a project's life cycle, post which all other development will happen expressly and according to fixed time lines.

Anuj Gupta, Mumbai

12th December 2014

Comment

As per the new FDI rules investors will now be permitted to exit either on completion of the project, or after the completion of support infrastructure in the project such as internal and approach roads, water supply, street lights, sewerage, among others.

Ashish Sharma, Mumbai

12th December 2014

Comment

Well Ashish,
Change in the 3-year lock-in period basically opens the portals wide for FDI funds who were sopped by this clause so far. It also means that there will be more pressure on developers to speed up construction of projects being funded so that these funds can exit at a appropriate time.

Anuj Gupta, Mumbai

12th December 2014

Comment

You are right Anuj,
The government's declaration of easier FDI norms for the construction sector has given rise to a lot of anticipation in India's real estate players. The fact that 100% FDI will now be allowed under automatic route to invest in completed assets along with relaxation of other norms, it is expected that FDI inflows will increase significantly.

Ashish Sharma, Mumbai

12th December 2014

Comment

The government's decision to modify FDI norms in the construction sector is expected to attract private equity investments to the tune of up to $3 billion in the real estate market in the next 2 years.

Anuj Gupta, Mumbai

12th December 2014

Comment