Uttar Pradesh saw real estate investment rising in the state, reports the Associated Chambers of Commerce and Industry of India. The apex body of industry has added that India as a whole has seen a reduced level of real estate investment.

The real estate investment in the state has grown by 106 percent. The state has bagged around 10 percent of the total investments in the country.

Over the four years, the state has witnessed remarkable growth in the real estate investment. The state ranked fifth among the states with maximum growth rates.

Bagging over 41 percent of total real estate investment in India, Gujarat topped the list. Investment grew in the state by over 700 percent. Kerala (550 %), Uttarakhand (400 %) and Rajasthan (175%) followed Gujarat respectively.

Avoiding the performance of these states, other states really did very badly. Some of the states saw investment falling by over 50 percent. India as a whole also saw a decline in realty investment.

Against the Rs.96000 Cr investments in the year 2011-12, this year India received only Rs.42000 Cr in the form of investment in the real estate sector. This shows that the decline in the country is far appealing.

If the states like Gujarat and Kerala had not performed well, the situation would have been still worse. The investments were done by both foreign investors as well as domestic investors.

Out of the Rs.8200 Cr investment in UP, a major share of the investment is done in Noida, Lucknow and Kanpur.

Realty investment is one of the key investments in India. The performance of the realty sector really affects the country. Though last year was a bad year for the realty, the property experts hope that this year will be a good one.

Keeping in mind India’s relatively young population — with an average age of 24 — will create continued demand for property and there is a huge supply gap. It’s definitely an under-exploited market in India, but Money can’t just be put into a place where people don’t want to work, don’t want to look at growth, or look at a better lifestyle.

The Indian real estate market is now a hot spot for global investors after new laws being enacted allowing foreigners to own 100% of real estate assets, resulting foreign real estate firms rushing into the country searching for projects and local partners.

India is attractive to  investors abroad because English is spoken in most regions as a first language and the culture is open to foreigners. You are safe.

Foreign investors probably have fewer problems with the government than a local. The government is scared of institutions and will fool around more with private individuals.

The most optimistic side of real estate in India is the prospects for residential development as millions of Indians continue to migrate to the cities. While land prices may seem to be hitting unsustainable heights to people who already live in those cities, migrants are willing to pay a premium.

Keeping in mind the current scenario real estate in India is definitely the right place for future investments.

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The firm also plans on considering pre-IPO placements of Rs. 1175 cr worth of equity shares.

Embassy Properties have joined ventures with a Malaysian company Azikaf SDN BHD, a member of Emkay Group to develop a business park in Cyberjaya, MKN Embassy Techzone. This will be first real estate development outside the country.

Presently the company is developing 49.65 million sq. ft. area. It includes 63 international and domestic projects.

The proceeds from the issue will be used to finance the construction and development of ongoing projects, investments, associates, paying loans etc.

The book running lead managers to the issue are Nomura Financial Advisory and Securities (India) Pvt Ltd, UBS Securities India Private Limited, Edelweiss Capital Ltd.

REITs invest in commercial properties mainly and pay rent collected from their properties to shareholders as dividend. This is why some investors see them as safer investments than property stocks.Another advantage is that they usually offer returns that are higher than yields of government bonds.

The increased activity in the REIT IPO market this year especially in the Asian continent is due to successful listing of Cache Logistics Trust in Singapore. Also Sunway City plans to list its REIT in Malaysia come July.

Kern anticipates Singapore to witness most of the activity with more than 20 to be listed there in the coming years from companies all across it’s continent. It already has more than 20 listed REITs such as Fortune, Saizen from Hong Kong and Ascends from India.

This Trend is only to bring fortune to our Country as well.

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They announced to increase their investment from 660 million US dollars to 1 billion US dollars in the infrastructure sector. In the realty sector they already have investments of 1.6 billion US dollars. They are planning to take deals in both the sectors as well.

Mr Shahzad Dalal, Vice Chairman of IL&FS Investment Managers Ltd said, “We will invest close to a billion dollars in infrastructure as well by about the end of this financial year.”

In the realty sector the firm has spent 1.2 billion US dollars from the total investment on over 30 deals. It is said that they are now looking at 10 more. The left over amount is expected to be deployed by the end of this year mainly in residential space along with commercial.
The company recently bagged a deal in the real-estate segment through IL&FS Milestone Fund in HCC’s Real-Estate project ’247 Park’ for Rs 575 cr for a 74 per cent stake.

Mr Dalal further added, “The outlook is fairly bullish on both Real Estate and infrastructure. We believe there are a lot of opportunities. There may not be many good projects, but because of our reach and reputation, we do see some really good projects.”

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The Realty sector in Hyderabad, Andhra Pradesh has shown sudden upsurge after the recent political turmoil it went through. The demand for both, commercial as well as residential properties have registered a rise.

The trend is more evident in Tier I and tier II areas specifically; making them a high demand market.

Even the prices of the realty sector have improved as the customers feel Hyderabad is the right place for investment which has contributed to increase in the sales.

Raj Kumar, Marketing Manager in a Real Estate firm puts forth, “NRIs, Doctors and Information Technology (IT) people are coming forward for the investment and even some of the central government employees are also coming forward. As you know, now a days comparing with the facilities what we are giving on what rates we are giving, people are seeing benefits and on this basis they are coming forward for investments and showing interest.”

The sector is one of the biggest in terms of number of employees working in the country. It is anticipated that in the next decade the realty sector will grow at a rate of 30% every year. This is bound to attract foreign investors with as many as 30 bn US dollars along with a number of IT parks as well as residential townships being constructed across our country.

Real Estate Investors have one more city to eye for.

The transaction involves issue of 10 crore fresh equity shares and transfer of the same to the two Mauritius companies. While LSOC would invest a little over Rs 88 crore in the Forum Ventures, the other foreign equity partner, LREF, would pump in close to Rs 11.7 crore.

Both LSOC and LREF would make investments in Forum Ventures through their Mauritius-based subsidiaries, LSO Subco and LREF Subco, respectively, the person said. Forum Project Holding, a development company owned by the Forum Group, holds around 37% in the Forum Ventures.

Forum Project Holding is engaged in development of real estate, lease rental, property management and related activities.

While LSOC has invested around $75 million in various real estate projects in India, LREF has a total exposure of $ 9.3 million in Indian real estate sector. Forum Ventures would act as a holding company and use the foreign funds from the Mauritian investors for making downstream investments in the real estate sector including investment in Forum ETA Realty. Forum Ventures holds 26% stake in Forum ETA, which is planning to set up a information technology hub near Kolkata.

The investment by LSOC and LREF comes at a times when the real estate sector is facing fund crunch with buyers and investors shying away. Backed by large landbanks, the real estate sector commanded very high valuations till some time ago. However, the valuations of listed players have fallen drastically, following the crash in the stock market. Lower valuations have made PE players and international real estate funds more cautious with their investments in the realty sector.

Interestingly, some international real estate companies and funds have shown interest in small unlisted companies. Israel’s construction company U Dori Group is picking up a 50% stake in residential project in JV with Hyderabad’s Surana Group for Rs 125 crore.

The non-residents of India (NRI)’s and the foreign direct investors have started taking interest in the real estate because the demand for a separate State does not seem to be on the cards.

Some believe that if the Telagana state was possible, then the prices would have gone down heavily but now the situation is different and people hope that the separation of the State is not on the cards.

“Some of the people in the coastal regions had withdrawn their investments but now they have come forward and want to invest further which will definitely give a boost to the real estate business,” said E. Peddi Reddy, TDP leader.

Since people are clear that Telangana would not be formed, a number of new ventures has risen in the city. Some builders believe that the Telangana factor was not the reason for the rise in investing. The reduction in the rate of interest by banks and the increasing value of dollar are some of the reasons for boom in the city.

“Two months after the by polls there was a little lull and it was a wait and watch situation. After by polls a lot of NRIs, foreign direct investors are showing interest. The ‘T’ factor impact should not have been there in the first place but for the past few days, we are getting a lot of calls and there is a lot of prospect to buy property,” said Y.Kiron, Suchir India Private Limited.

The ratings agency noted that while Indian construction companies have witnessed sharp growth in their order books and revenue with the increase in investment projected over the next five years, the majority of the profit in terms of revenue and earnings will start accumulating from fiscal year 2009.

Fitch also said it imagines that the industry to exhibit negative cash flow from operations due to increased working capital requirements. Substantial investments in real estate will also put pressure on the industry credit profile, it added.

The ratings agency warned that credit profiles are likely to deteriorate, with increased debt required during the mobilisation phase to complete the massive projects but will get better substantially over the long-term once these projects achieve the stable revenue phase.