Due to the slowing realty market and obstructive approval procedures, India-based developers are flocking in large numbers overseas to tap the real estate sector there.
After acquiring the landmark MacDonald House in Prime Central London from the Canadian government for over Rs3,000 crore last year, the Lodha group has recently bought 1.15 acres of its second property in London at New Court. Lodha plans to develop this property into a residential project.
Said Abhishek Lodha, managing director of Lodha Group: "Lodha plans to focus on London as one of our two main markets and we will continue to look for opportunities that come up in this market. We will serve London in the same manner that we serve Mumbai – with world class products intended to serve all key market segments."
Mantri Group has recently tied up with Malaysian land holders and Hiranandani has undertaken a slew of residential and commercial projects in Dubai.
"We are in the process of finalising an agreement to develop 150 acres of land. This chunk of land will be developed into residential, commercial and information technology projects. Compared with India, land is available at cheaper rates abroad. Besides, there is less corruption and government approval is hassle free," said Sunil Mantri, managing director of the Mantri Group and president of NAREDCO, the Indian developers' umbrella body.
"There are many developers who are either buying land or tying up with local landlords/developers to undertake projects," said Manohar Shroff, secretary of Maharashtra Chamber of Housing Industry, Navi Mumbai.
"Dubai is a promising destination for Indian developers. About 40% of Dubai's population comprises of Indians, so they are potential buyers. Earlier, very few developers were willing to go outside India, but recently, their number has increased," he said.
Another Mumbai-based developer explained the reasons why realtors are eager to explore opportunities overseas. "We want to take the risk as there are an ample number of opportunities. The Indian realty market is always shaky due to constant changes in policy and the volatile political situation," he said, requested anonymity.
Besides, London and Malaysia, Sri Lanka, Romania, the Gulf and Europe and parts of South Africa are also hot investment destinations for Indian developers.
Pranav Vakil, a real estate expert who was earlier connected with brokerage firm Knight Frank, India, told dna on Friday that Indian developers want to tap the existing Indian customers who are outside the country.
"The slide in the rupee against the US dollar has compelled Indian developers and investors to park their money in safer locations. They want to protect and safeguard their assets even though the return is overseas. This is nothing but diversification of wealth," said Vakil.