India's realty sector to get $30 bn foreign investment

Seeing the rise in the construction of shopping mall and complex in the major cities, the Associated Chamber of Commerce and Industry of India (ASSOCHAM), has revealed that India's realty Industry is expected to grow at a fast clip of 30 percent in next 10 years, offer 20-25 percent returns and secure foreign investment worth $ 30 billion. Interestingly, ASSOCHAM says that foreign investment component in the development of real estate will come through private equity funds instead of institutional mechanisms. The total investment in the sector is likely to be $ 102 billion in comparison to $ 14 billion at present which includes $5-5.5 billion of foreign investment.
The growth in the industry is expected to go up on the account of rapid expansion of IT industry, retail and residential sector in the country, says the study. The IT sector alone is expected to require about 200 million sq ft of space across the major cities and large townships. Similarly, some 30 million sq ft of organised retail space is currently available and another 90 million sq ft is likely to be added by 2008 by the 265 mall projects on the drawing board.
According to the ASSOCHAM study, India is the only country in Asia where the return in real estate investment is 20-25 percent in comparison to 15-18 per cent in other countries of the continent. However, the real estate industry in India is confronting a major problem implication in getting approvals for setting up a township. Pointing towards the problem of the real estate sector, the president of ASSOCHAM, Venugopal N Dhoot said, "The only problem that the real estate sector is currently confronting is with approvals for setting up townships, as a number of central and state agencies are involved in this process. The government, both at central and state level must ease the process involved in approving the proposals of town ship." To help the industry grow at rapid rate government must take a concrete step, added Dhoot.
Source:- http://www.headlinesindia.com/archive_html/02December2007_64676.html