The 100% foreign direct investment liberalization by the government in real estate has started luring Japanese and Chinese Investors in India.
The global real estate service firm Jones Lang LaSalle(JLL) alleges that Japanese investors are eager to make investments amounting to 2 billion dollars in subsequent three years in Industrial and residential projects. As per JLL, Indian property market is becoming a favorable place for investment for the Japanese and Chinese developers.
The high-flying Chinese developers, Dalian Wanda Group, have already signed a memorandum of understanding (MoU) this year with the Haryana government to build up ‘Wanda Industrial New City’ bringing about an investment of 10 billion dollars over a decade. Also among the eminent deals comes the MoU signed between China Fortune Land Development Company Private Limited and Haryana state which will entail outsized industrial parks in the state. Adding to the list, Gezhouba, another well-known Chinese construction company is seeking to invest Rs. 10000 crore in irrigation projects of Telangana State.
Indian Real Estate will further be a focus for the renowned investors from China says, Anuj Puri, Chairman, and Country Head of JLL India. This anticipation is supported by a survey conducted by RICS-JLL in the beginning of this year which revealed that 62% of the respondents consider that developers and private equity firms from Japan and China are enthusiastic to cross the threshold and invest in the Indian real estate market in 2016.
He further added that china’s slow-paced economy is making the developers from the country magnetize towards India seeking an opportunity to maximize their profits from India’s growth. As compared to most of the deals which other Chinese companies invested worldwide in 2015, the Wanda Deal is the most prevalent investment. Mr. Puri also highlighted that Japanese developers are also getting pulled by Indian Real Estate potential growth and are seeking to make strategic partnerships and indulge into joint ventures with Indian builders but the industrial projects are getting more favored for investment by them.
Indian Real Estate is at the outset of boom and therefore overseas developers will tend to enter in partnering terms with their Indian counterparts. Large Residential Projects are captivating Chinese developers but commercial asset class is still waiting for the onset of investment from these foreign developers.
Curated by editor at Wienerberger India