With the entry of real estate mutual funds in India, retail investors will be poised to take advantage of the sizzling realty markets. Of late, the Real Estate Mutual Funds (REMFs) which have caught the fancy of retail investors became the buzzword of the financial markets. With the approval of guidelines for REMFs, the average Indian investor will be poised to take advantage of the booming real estate industry. Though these funds have been much awaited since long, Sebi has finally timed them right. Many of the mutual fund players have been gearing up to ride on the investors interest in these funds.
Analysts
at Merrill Lynch expect an annual growth rate of 30% for the
real estate industry and estimate that it might grow to $90
bn over the next 10 years. Though the industry has been witnessing
robust growth for the past couple of years, it has become
increasingly expensive for an average Indian to purchase a
property, with the property prices skyrocketing. Therefore,
considering real estate as an investment option has become
the privilege of the wealthy. Institutional investors and
high net-worth investors also have the option to invest in
real estate properties through venture capital funds. Though
retail investors are not eligible to invest in such funds,
with the advent of REMFs, now they are also poised to share
a piece of real estate bonanza.
Real
estate industry in India has seen sustained growth in recent
years backed by the booming economy, liberalized FDI regime,
favorable demographics and soaring fortunes of high-tech sectors.
The real estate prices in leading Indian cities like Mumbai,
Delhi, and Bangalore have surged by almost 100% in certain
select areas over the past year. DLF, Omaxe, Unitech, Vipul,
Eros, Zee, Parsvnath, Balaji are major developers involved
in construction activity that covers mega malls to luxury
high rises, office spaces, IT parks, special economic zones
and townships.
The
sizzling real estate market has witnessed some of the biggest
deals in the recent past. Recently, Unitech has settled one
of the biggest real estate deals at Rs. 1,583 cr for a 340-acre
plot auctioned by the Noida Development Authority. The Ahmedabad-based
Adani Group stuck a deal with Housing Development and Infrastructure
for Rs. 22 bn to develop a commercial and retail hub in Bandra-Kurla
Complex, which is Mumbai's landmark commercial business district.
Reliance bought a 7.5-hectare plot in the Bandra Kurla Complex
for Rs. 1,104 cr. |
