| Source: Economic Times | | | | flowed into the sub-continent's real estate |
| | | | sector. |
| Indian Real Estate: | | | | |
| | | | Even so, the Indian real estate sector, |
| A Deutsche Bank Research report informs, | | | | despite a temporary lull in its boom, |
| whereas, there are significant risks inherent | | | | continues to rake in investors and |
| in the Indian real estate capital market, | | | | investments alike. As, everyone involved in |
| which, though presently small, despite all, | | | | the market realise, transparency and |
| has managed to achieve a remarkable growth | | | | relaxation of rules and regulations are |
| momentum, especially in the private equity | | | | absolutely necessary for the good times to |
| and debt markets. | | | | continue, requisite measures are being taken |
| | | | to resolve the issue. Already, developers and |
| While, private debt or bank loans to | | | | builders keen to ensure nothing disturbs the |
| commercial real estate have been responsible | | | | Indian real estate boom times are adhering to |
| for fuelling growth levels, both private | | | | international norms and standards in their |
| equity and private debt markets are also set | | | | public offerings. |
| to grow significantly in the coming years, | | | | |
| adds the report. | | | | As the sector organises itself, there is no |
| | | | doubt the risks of investing in Indian real |
| Enumerating the risks presently inherent in | | | | estate capital market will evaporate. |
| the sector, the report highlights liquidity, | | | | Patience is the name of the game, as India |
| regulatory, overall market transparency, | | | | cleans up its act in many sectors. This |
| property market transparency and | | | | undoubtedly is bound to happen, as economic |
| macro-economic risks as the five major | | | | prosperity filters down to all segments of |
| threats, which are likely to continue for | | | | Indian society. Chak de to that, it is |
| some time to come. | | | | something everyone has been waiting for. Let |
| | | | the winds of change set in motion by the |
| It also cites regulatory constraints being | | | | enterprising IT / BPO industry, sweep away |
| responsible for making it difficult for | | | | the corruption, the long lasting legacy of |
| foreign investments to flow into the sector, | | | | the British Raj. If, it were not for the |
| such as, foreign investors requiring | | | | Nabobs of the East India Company and the |
| permission from the Reserve Bank of India | | | | British bureaucrats, India might have |
| (RBI) for owning property in India. | | | | retained its honest past. But, it is a common |
| Similarly, for capital repatriation, | | | | Indian failing to learn the undesirable as |
| investors need RBI approval, while FDI is | | | | quickly as possible, while refusing to be |
| limited to a small set of opportunities, such | | | | taught the best. |
| as, real estate in small towns. | | | | |
| | | | For example, instead of taking in the lesson |
| Then too, transparency is another aspect on | | | | of corruption so well at the knees of our |
| which the Indian real estate sector ranks | | | | British overlords, would that we had, instead |
| very low, with Transparency International | | | | learnt civic pride, courtesy in public i.e. |
| rating India at 88 out of 150 countries, with | | | | polite driving with consideration extended to |
| regard to perceived corruption level. | | | | smaller vehicles, cyclists and pedestrians |
| | | | alike, opening and holding doors open for |
| Pointing to the need for more professional | | | | all, etc. etc., would that these were some of |
| due diligence and valuation institutions, the | | | | the habits imbibed. |
| report said, "Although market transparency | | | | |
| has obviously improved, it is still hard to | | | | Still, the IT / BPO industry has set the ball |
| get reliable and consistent information on | | | | in motion and once the whole of India is |
| the Indian property market." | | | | prosperous, wanting for nothing, then the |
| | | | rest will fall in place. Just like weather |
| At the macro-economic level too, the report | | | | seems to be responsible for a country's |
| also cites problems, such as, inadequate | | | | culture, as was seen in the hot spell |
| provision of public goods i.e. education and | | | | experienced in the normally cool climes of |
| transport infrastructure in many regions, | | | | Great Britain, which unusual hot weather saw |
| while, stating volatility in interest rates, | | | | the habitually calm, cool and collected Brits |
| inflation and exchange rate risks have | | | | acting out the behaviour of unmanageable, |
| lessened, yet, they still have to be borne in | | | | unruly, unbiddable Indians. In other words, |
| mind. | | | | when the weather is pleasant, good manners |
| | | | come to the fore, but the heat only manages |
| It also highlights the fact; the Indian | | | | to bring out the devil in us all! Perhaps, if |
| investment market is still in its infant | | | | India suddenly turned into a cool and |
| stage, as investors face serious challenges | | | | pleasantly green land, may be the Indians too |
| in finding appropriate investment products. | | | | would turn into well-mannered, unflappable |
| However, upbeat about the future prospects of | | | | earth dwellers. |
| the sector, the report points out that in | | | | |
| 2005 nearly $850-million additional capital | | | | Indians across the globe, Chak de! |