• Investment World
• eWorld
• Catalyst
• Mentor
• Life
• Canvas
• Praxis
• Urban Pulse
• Brand Quest

Our Bureau

Mr Pranay Vakil, Regional Chairman, Knight Frank Group, with Mr Adam M. Catchpole, Regional Director, Knight Frank Asia Pacific, at a press conference in Mumbai on Wednesday. — Shashi Ashiwal

Mumbai , Sept. 10

ONE of the barriers to the internationalisation of the real estate industry in India is the regulatory environment which does not permit of capital efficiency and liquidity, according to Mr Steve Mallen, Partner and Head of Global Research at real estate consultancy and services company, Knight Frank.

An example was the restriction of foreign direct investment to a minimum development size of 100 acres, said Knight Frank officials at a conference on Wednesday.

"We have made representations to the Government to bring this limit down to 15-25 acres," said Mr Tariq Vaidya, Head, Advisory Services, Knight Frank.

"An area of 100 acres is only available in the outskirts of cities. If the developer comes out with a good product, he may not get the value for it in these localities."

Aside of the regulatory issues in real estate, there was good evidence that the Indian real estate market is quite robust, Mr Mallen said.

"That the inflation rate is under check in India is a good indicator of a well-regulated economy." The need for housing, the growth of the ITES sector - in particular BPO - as well as the growth of the organised retail sector (poised to grow exponentially in the next five years) would keep the industry robust for some time to come, he added.

According to a Knight Frank presentation, 200 malls are slated to come up in the next five years, with foreign retailers increasingly looking towards India for growth.

The presentation also said that the rates for residential property have increased more than the inflation rate over the last two years.

However, Mr Mallen expressed caution about the growth of the BPO sector and the real estate opportunities that it would bring, saying that while it certainly would grow, it might not be as dramatic as forecast largely due to the political outcry that would result from the loss of jobs in countries such as the US and the UK.

"Although both these countries' economies are large enough to absorb the loss of, say half a million jobs, such a job loss would be localised in its concentration and one might see a politically more vociferous environment, particularly in the UK where London-based clients which were outsourcing to localities in North England might now consider outsourcing to countries such as India."

Addressing presspersons, Mr Adam Catchpole, Regional Director, Knight Frank Asia Pacific, said that Knight Frank is planning to enhance their presence in more Indian cities.

Article E-Mail :: Comment :: Syndication

Stories in this Section
7% rise in indirect tax collections in April-August

Copyright © 2003, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line