Interest of overseas funds in the Indian real estate sector is intact but they have turned their focus on specific projects instead of pumping the money at one go, according to Sanjay Dutt, executive managing director, South Asia, of Cushman & Wakefield.
About $2 billion private equity had come into the real estate sector in the past two years and funds were keen to make investments after going through the value proposition of individual projects, he said here on Wednesday.
Though it will take some more time to go back to the peak demand level of 40 million sft witnessed in 2007 in the commercial space, which declined to 25 million sft to 2009, the demand had subsequently inched up to 30 million sft in 2011 and continues to be at that level in the current year.
Retail space has a vacancy position of 20 per cent out of the 15 million sft available, but this does not reflect the actual demand position because close to 5 million sft space is not relevant in terms of their location, according to him.
Taking a lead over commercial as well as retail segments, the residential construction segment is driving the real estate sector due to the quick turnaround time for both developers and equity funds, who are looking for cash flows in a somewhat depressed market.
He said the Hyderabad market had remained suppressed in terms of prices due to political uncertainty and it's high-time for investors to take advantage of this situation.
There was a decline of 76 per cent in new residential project launches in the first half of the current financial year in Hyderabad compared with last year.
Source: www.business-standard.com
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