Residential property in India is expected to acquire $1 billion investment this year. According to an industry expert, the most pivotal reason for this is India’s residential properties attractive rate of returns, which is averaging at a high of 20-22 per cent per annum.

Rubi Arya, executive vice-chairman of the Mumbai-based Milestone Capital Advisors, explains this further. According to her understanding, Private Equity funds in Indian real estate sector has already been able to raise $420 million in the first two months of this year, compared to $520 million for the whole of last year.

Arya believes that the availability of the Real Estate Bill mandate has made deals for Private Equity firms easy and it will certainly seem to go up. She is also hopeful of the fact that further reformation in the real estate sector will only fuel up further fundraising opportunity. This is in regards to both residential and commercial sectors.

“Mid-segment housing and affordable housing can take returns to as high as 20-22 per cent per annum through hybrid investing, that is capital security plus equity upside” – Rubi Arya

According to Arya in spite of growing by leaps and bounds, the real estate sector is beginning its upward journey once again. And this only seems to be increasing from here on. With the fuel prices down, developers are having a sigh of relief with overall margins for positive growth.

One of the pivotal points raised by Mrs, Arya was that of Foreign Direct Investments. She did not forget to mention how with the recently passed real estate bill,investors can look forward to far higher transparency. She further elaborated how this has led to a lot of warming up of Non- Resident Indians (NRIs) and Foreign Direct Investments towards Indian real estate.

“The availability of foreign capital will naturally increase with the government permitting NRI investments into domestic Alternate Investment Funds” 

She hopes that the Real Estate Investment Trusts will soon see listings by developers and thus be lifting the commercial reality market to a high profitability.

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Information source- businesstoday

Curated by a Building Expert from Wienerberger India

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