|
Global real estate funds build hope on Indian market
Real estate news By Shailesh Menon
12 Oct, 2007, 0905 hrs IST
Escalating interest rates, perception of a real estate asset bubble and aftershocks of US subprime credit defaults have not dampened the spirits of overseas funds looking to invest in the Indian realty sector. In the past nine months, overseas funds have raised around $2.4 billion towards investment in real estate projects; and if estimates are to be believed another $1.1 billion will flow in before the end of this year taking the grand total to a whopping $3.5 billion. Real estate fund-raising continues to boom in 2007 following strong returns from real estate firms.
According to the London-based Private Equity Intelligence (Preqin), 88 new funds have raised an aggregate $59 billion this year as compared with $72 billion by 116 new funds in the whole of 2006. Although firms are raising record amounts of capital, there are now more funds on the road than ever. Over 200 funds are looking to deploy an aggregate $105 billion in the sector across the world in 2008. This is thrice the amount raised as recently as January 2007, and a massive six times increase from January 2006, says a Preqin study.
“From what we find, there has certainly been an increase in the levels of fund-raising for funds focusing on the Asian market, with India being a particularly popular source of interest. In fact, India is now the third biggest global centre for private equity real estate in terms of number of firms in operation, with almost 3% of all private equity real estate firms located there second only to the established markets of the US and UK,” said Tim Friedman of Preqin. India is noteworthy as not only does it see significant investment from established western managers with pan-Asian and even India specific funds, but it also has a well developed and growing number of domestic managers, which make significant contributions to investment in India, added Mr Friedman.
Send tips or a Letter to the Editor to editor@updatere.com
|
