Realty players sniff opportunity in new airports

The aviation industry is expected to get a major boost with the government on Monday announcing a slew of reforms in the sector. The announcement led to stocks of some of these airlines moving up the graph.

As per the new policy, the foreign investors excluding the foreign airlines have been allowed to invest in the Indian carriers. "Foreign investment up to 49% is allowed under automatic route in scheduled air transport service/domestic scheduled passenger airline and regional air transport service. It has now been decided to raise this limit to 100%, with FDI up to 49% permitted under automatic route and FDI beyond 49% through government approval. Further, for NRIs, 100% FDI will continue to be allowed under automatic route."

Anshuman Magazine, chairman & MD, CBRE South Asia, said, "There will now be more opportunity for real estate development in many of our brownfield airport sites. The development of new hospitality spaces, airport retailing, support facilities, and other related space requirements will now receive a fillip."

Peeyush Naidu, partner, Deloitte, said, "While the increase in FDI for aviation is welcome as it will allow flexibility, we are unlikely to see investors suddenly rushing to invest in airlines just because the cap of 49% has been removed. Also, remember that investment by foreign airlines is still capped at 49% -- so it remains to be seen whether other investors such as PEs and the likes would have the risk appetite to make such investments."