Real Estate has traditionally not attracted many foreign players as it was largely unorganized in the past. Today with developers becoming more organized and protection laws like RERA coming into place, international real estate developers are looking to create their own space in the Indian real estate market. Things are becoming more open and digital and the investment into real estate is more transparent thus attracting more attention from foreign players. The investment from foreign players needed local partners earlier but today several firms are setting up on their own. Their investments are not a restriction to construction alone – they are looking at infrastructure projects like warehousing, logistics support and also setting up interior firms.
Last year saw a slew of foreign developers investing into India such as the Japanese property firm Sumitomo Realty bought a three-acre plot in Mumbai’s Bandra-Kurla complex, the Australian firm LOGOS ventured into the warehousing sector, Hong Kong-based Risland Holdings is developing commercial hubs and townships and Dubai’s Danube Home introduced its home interiors services. Reports state that private equity firms have invested over $4.2 billion into India’s realty market in the first half of 2019, up 10% from a year ago.
The larger interest from foreign players has been in mass housing projects and with the push for affordable housing, there is a lot of interest to invest in different cities in India. There are certain advantages that international developers come with such as
International players tend to have deeper pockets and will have the ability to deliver projects faster and as per RERA norms. They will have the ability to meet customer expectations on timely delivery and may even be able to offer deep discounts on certain aspects in comparison to their Indian counterparts.
Stricter safety standards
Foreign real estate developers follow stricter standards in quality and safety and will definitely try to spread those practices in India. They are far better organized than many of the current developers thus making it easier for the customer to work with them.
Emerging technologies like IoT, AR/VR, and big data analytics are already widely used by foreign players. Thus, giving them the first-mover advantage in employing these technologies in their developments in India.
India has become a prime market for international real estate developers on the exponential, rise in the number of ultra-high-net-worth individuals over the last decade. The influx of foreign players will certainly cause a lot of smaller developers to disappear. If the government wants to protect these builders, then they will need to create rules to ensure that the larger foreign players do not overtake all the projects.