NRI's Optimistic about Indian Real Estate after Elections

Investors from the UAE are increasingly looking to put their money in India’s real estate in view of the country’s positive environment and long-term growth potential, a financial services company told Gulf News.

ASK Group, which earlier launched funds that are focused on residential real estate in India, has received encouraging response and is bullish to attract a large interest from investors, especially high networth clients, in the UAE.

The company focuses on institutional investments, such as fund of funds, sovereign funds, endowment funds and family offices, which are advisory firms that serve affluent households. It currently seeks to raise $200 million (Dh735 million) offshore fund to be able to invest in housing developments in India.

“Family offices currently are more proactive in participating in India growth story and we hope the process of institutional investors has begun. [We’ve] got encouraging response from family offices and could able to close more than 50 per cent of the fund from UAE currently,” said Sunil Rohokale, managing director and CEO of ASK Group.

Rohokale said both non-resident Indians and citizens in the UAE, including institutions and ultra high-net worth residents, are looking for diversification and are actively seeking India’s real estate as a “de-risking strategy”.

He said the introduction of real estate investment trusts (REITs) in India and regulations such as the Land Acquisition Bill and Real Estate Regulatory Bill, coupled with a stable currency and “healthy macro-financial numbers”, have helped renewed investor confidence. 

“Of late, we have seen many [Indian] developers coming to Dubai, setting up their offices and doing road shows to which investors have reacted positively because of currency gains. The property prices in India have bottomed out and in the past, many investors have made money in Indian real estate and hence are more comfortable,” Rohokale added.

ASK Group is a diversified financial services company that has been operating in India for over 30 years. Its asset management business covers equity, private equity and real estate private equity. The company considers UAE as a “very strategic market”.

Investors from the UAE are not just focused on real estate funds. Private wealth is spread across a wide range of vehicles, including mutual funds, traditional savings and long-term investment plans, among others.

A new survey commissioned by Standard Life suggested that investment flows from the UAE are likely to increase, with two thirds of NRIs saying they are optimistic that India will be more investor-friendly after the general elections.

Source: Gulf News

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Surge in demand for housing and office space after general elections Expected

Real estate developers are looking forward to a revival in demand for housing and office space after the general elections. Experts, however, rule out an immediate easing of the slowdown and point out that demand can be revived only in the medium term after the economy picks up pace and reforms start to kick in. 

"There is a challenge today because of the slowdown and also (poor) sentiment. The latter will improve if a stable government comes in, which is already being indicated by the stock market and strengthening rupee," said JC Sharma, managing director of Bangalore-based Sobha Developers 

Sharma feels the new government, formed by whichever party or coalition will be bolder and could undertake stronger policy measures. "They will want to show that they mean business. They will bring in a fresh approach that will augur well for the economy," he said. 

Anuj Puri, country head of property advisory firm JLL India feels a stable government will take more and faster policy decisions. "When I say stable government, I refer to a limited number of coalition partners. The fundamentals may take a little longer (more than a year) to shape up, but the sentiment push following the formation of a stable government will start improving the real estate market," he said.

Source: The Times of India

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General Elections 2014 - A Great Hope for Real Estate

As General Elections are the flavor of the season going in India, everybody has been speculating about Real Estate scenario post elections. This is the only time which will tell us whether real estate market will witness boom or bane or remain intact. Real Estate Professionals are unanimous on one prediction that things will start looking up for the sector only in the second half of 2014 when clarity on the new government will emerge and businesses start investing.

2013 was not a good phase for real estate, when all properties including residential, office and retail barring some cities such as Bangalore saw a steady decline in absorption. In 2014, situation might be changed as the general election of 2014 is anticipated to have positive bearing impact on real estate.

Scenarios after General Election: There can only be following 2 scenarios after general elections.

· Existing Government is re-elected

· New Government is elected

In both the scenarios there ought to be some changes in the existing market, both economic & financial. Of course the change would be more apparent changes in case the government is upturned. It is a known fact that Property market is highly affected by the health of economy & finance in the country.

Financial Impact: With a change in the politics, definitely there will be changes in the foreign investment policies of India and that will impact the way investments are made thereafter. Even if the Government remains intact, this market is in for changes. This is because; currently the policies are being formulated keeping in mind the vote-bank. Once the elections are over, policies will be reformulated and that will affect how investments are made in Real Estate.

Economic Impact: A change in politics will not have any direct or visible impact on the economic markets as it is controlled by an independent body, RBI. But yes, indirectly there will be a lot of effect here as economic policies have to be synchronized with financial markets. Any non-synchronization would lead to halted growth and inappropriate levels of inflation in the country.

Real estate will also get affected in this case also.

For those sitting on the barrier to purchase house or waiting to sell at a decent profit, the outcomes of this year’s general elections is expected to be a game changer. From the end-uses issue of view, it is probably the best time to purchase. One can aim on buying from resale market. As proposed earlier, there is powerful prospect that distress sales will increase and it presents end-users with an opportunity to purchase at lesser rates. However, buying in secondary market means, one has to pay huge money of property value in cash.

Reference URL: http://www.realthorizon.com/2013/11/effects-of-general-elections-2014-on.html

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