‘Foreign investors eyeing Indian realty market on a selective basis'

Foreign investors are looking at investing in Indian real estate market on a selective basis, according to Colin Dyer, Global CEO, Jones Lang LaSalle.

Providing a macro-overview of Indian realty sector, the CEO of international property consultancy, who spent a week in India recently, in a statement today said that foreign investors are looking at infusing capital behind successful investment managers and many are directly investing.

According to Dyer, the sector is faced with challenges such as liquidity, lack of availability of serviced urban land, procedural delays in approvals and the slow pace of infrastructural growth. Still there is relatively low transparency in real estate terms.

In commercial real estate, there has been a demand contraction of about 15 per cent in 2011. The market will continue to be under stress for another four quarters. And the retail real estate market is seen to be maturing. In the residential property market, capital values are going up because of increased input costs.

Multinational companies are cautious about committing because their home countries are not doing well. They are in wait-and-watch mode.

Mumbai and Delhi continue to have the inherent demand for residential properties. There have been fewer launches and developers' input costs have gone up.

Many of JLL clients are evaluating the lease versus buy option. The MNCs, who typically leased their offices, are studying the benefits of owning real estate in the wake of the proposed lease accounting changes.

According to the consultancy, India has seen roughly $18 billion being invested in real estate market over the past seven years.

rishikumar.vundi@thehindu.co.in

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