Money Comes to
Real Estate by Sheikh Pervez Hameed 7/5/2006
Articles on Real Estate
For the international investors, India's real estate valuations in 2006 can be
considered as Sensex trading at 3000 (Sensex closed over 12000 last week). Four
times growth from here? Unbelievable ... but might just happen.
Rs. Twenty Thousand Crores expected in multiple Real Estate IPO's. All this much
before by the end of 2006. Inspired by booming real estate, huge pent up demand
and the best growth sector amongst all sectors, real estate has become the
darling of investors, at least for the overseas investors.
For domestic investors, it was always the darling. However, overseas investors
prefer to route money through the listed companies ... the immediate
beneficiaries are DLF (Rs. 13,000 Crores), Ansals (Rs. 2,000 Crores) , Omaxe
((Rs. 3,000 Crores), Ahluwalia Contracts (Rs. 300 to 500 Crores), Parsavnath ...
all in various stages of launching IPO's.
Unitech already trades and has shot up considerably. DLF claims itself to be the
largest real estate firm in the world, with 100 million Sq. Ft. in construction.
They aspire to have projects all over the world as India is a small pond for
them.
Adding to frenzy is the retail growth story. Still considered to be in nascent
stage, retail is attracting big time money. A T Kearney listed India as the most
attractive retail destination in the world, China (saturated market) is at fifth
place.
Adding substantial momentum to the bullishness is the soft India story. Big time
emerging market story backed by un-violated culture, way of life and movies
different to Hollywood. This is becoming the differentiator between China and
India. Plus India's late start has given India the opportunity to open up
economy in an environmentally friendly manner ... which China did not do. Hence,
at sometime, China will have a heavy bill for environmental damage.
Consensus seems to be emerging that India's embrace of modernism is a very
Indian way not an American way. Perhaps two magnets will emerge in the world ...
America/Europe and India. Other countries in the Asia Pacific region are doing
economically well but with the soul of America ... a sure misfit.
