India ViewPoint - Investing in India: Where are we and where are we headed July 2016
India has been fast emerging as an attractive investment market; macroeconomic strengths, government initiatives to spur investments, a developing real estate market – all integrate together to provide a market ripe for attracting investors.
The Indian real estate sector provides growth opportunities that investors are keen on taking up. But then, a key issue plaguing the sector’s growth has been the availability of funds.
However, that is beginning to change as the market has seen more readily available funds now with instances of developers getting involved in construction finance with interest rates being competitive with that of banks.
With the emergence of new channels of funding, the past couple of years have been vibrant, as several investors have re-emerged on India’s development scene.
Traditionally, residential has been the most attractive segment for foreign investors, However, in the past 3-4 years, investors have been displaying inclination towards investments in alternate segments such as warehousing, retail and hospitality.
Another key concern for the developers has been the mobilization of funds by retail investors – to which REIT’s could be the answer. While the recent REIT regime is a welcome step, the regime needs to factor in certain critical factors to ensure a successful launch.