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