Sarbajeet K. Sen
New Delhi, April 13
FOREIGN direct investment (FDI) in real estate may be seeping down to the lower floors of the industry.
Barely weeks after the Government allowed 100 per cent FDI in the construction, enquiries for foreign investments are reaching not only the top-rung construction companies but also mid-tier players in the sector.
Comparatively smaller real estate firms such as Suncity Projects Ltd, Alpha Buildtech and Vatika Group have started receiving a slew of investment proposals from developers based in South-East Asia, and investors in the UK and the US.
Suncity Projects - which is jointly promoted by Essel group, Action Group and Odeon Builders - says it has received 3-4 enquiries from the US and Singapore for joint ventures in new residential, commercial and entertainment projects.
"We are procuring land in Gurgaon and some other parts of the country, and these investors are looking at a joint venture opportunities in these upcoming projects. We will take a month or two to decide on the proposals. We will definitely want to know what these parties bring to the table beyond the financial muscle. Only then we will take a decision," Mr Ashok Bansal, Director, Suncity Projects, said.
According to Mr S.K. Sayal, CEO of Alpha Buildtech, the company is open to joint venture proposals for integrated township projects. "We have received enquiries from developers in South-East Asian nations as well as investors in the UK and the US, mostly for integrated township projects. We have acquired 150 acres of land in Haryana, and are in the process of acquiring over 100 acres each in Rajasthan and Punjab. We will decide on the FDI proposals after we acquire the land and receive the required approvals," Mr Sayal said.
He said that the company was getting both direct enquiries from developers, as well as from venture funds where foreign investors were parking money. "There is now a rush on venture funds' front, and that is a strong model for foreign investors to invest. Since these funds cannot put more than 25 per cent of their corpus in a particular project, the risks are hedged," he added.
Says Mr Pankaj Pal, Vice-President - Sales and Marketing - Vatika Group, "We have been approached directly and through international property consultants for joint ventures. There are developers from Singapore and the US who are looking at investing in India. Singapore-based developers are cash rich, but do not have much investment avenues within their own country."