Over the last couple of months, there have been a slew of big deals in the Indian real estate sector. One might have read about them in passing, but let's put them into perspective. There are two broad areas of the industry that are seeing action the commercial real estate market and the affordable housing market. Wall Street has poured millions of dollars into our market. Goldman Sachs, Warburg Pincus and Blackstone have invested over $900 million in Indian real estate.
Goldman Sachs invested $150 million dollars in Piramal Realty and $250 million in Bangalore-based Nitesh Estates. A month before that Piramal raised 1800cr from Warburg Pincus. Blackstone acquired the 247 Park Office project in Mumbai for $160 million.
According to a report by KPMG released at a recent conference, Private Equity investments committed into Indian real estate have crossed $3 billion in this year alone. We also know that pharma company Abbot India will pay Godrej Properties 1480cr for a 19-storey office building in BKC in Mumbai. TCS entered into an agreement to lease over two million sq ft at Hiranandani Estate in Thane for what is billed as the largest single office space transaction in India in terms of area, according to the Economic Times.
According to a report by KPMG released at a recent conference, Private Equity investments committed into Indian real estate have crossed $3 billion in this year alone. We also know that pharma company Abbot India will pay Godrej Properties 1480cr for a 19-storey office building in BKC in Mumbai. TCS entered into an agreement to lease over two million sq ft at Hiranandani Estate in Thane for what is billed as the largest single office space transaction in India in terms of area, according to the Economic Times.
Why is the global market turning to Indian real estate when the customer has turned away? Our interactions with the industry show that investors believe that the sector is turning around in some pockets.
The uptake or absorption of commercial space has improved tremendously in the last year and this information is heartening for us as investors. When the demand for commercial space increases it means simply that more jobs are being created. More jobs will mean a better economy and more demand for housing. Within the residential sector, investors are focused on affordable housing where they foresee the highest demand in the future.
The uptake or absorption of commercial space has improved tremendously in the last year and this information is heartening for us as investors. When the demand for commercial space increases it means simply that more jobs are being created. More jobs will mean a better economy and more demand for housing. Within the residential sector, investors are focused on affordable housing where they foresee the highest demand in the future.
What can we gather from news of these investments? If global investors believe the Indian market will offer them substantial returns in the future, it means they also believe there will be a turnaround in our market. The time to cut the deal on property would be now, before the prices begin to rise. My advice to all those waiting to buy a home would be to start moving on the deal right now.
The second and more important learning from this information is to be very selective about the builder or developer one invests with. Global companies have picked builders with strong reputations after conducting tremendous due diligence. It is a practice we must follow as well. The onus of conducting research on builder lies solely on the buyer. But having said that, don't let this opportunity pass by. If one is in the market to buy a home, this is the market to be in.
The second and more important learning from this information is to be very selective about the builder or developer one invests with. Global companies have picked builders with strong reputations after conducting tremendous due diligence. It is a practice we must follow as well. The onus of conducting research on builder lies solely on the buyer. But having said that, don't let this opportunity pass by. If one is in the market to buy a home, this is the market to be in.
Source - TOI
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