Investing in India Property

Country:  India

Wherever you turn in India there’s a feeling that things are improving, and fast. Admittedly, the infrastructure is often still poor, traffic and pollution in its major cities are problematic, but everywhere there are firm signs of an economy that is booming. India is one of the largest economies in the world and, with a high amount of both domestic and foreign investment fuelling the rapid economic growth, it is fast becoming a key destination for western businesses. This has had a knock-on effect on the housing market, causing a huge demand for property to accommodate India’s rapidly growing middle classes.

Axiom Estates is well placed to bring the growing numbers of new property developments springing up across India to the UK public. With their head office in Calcutta they have offices around the country, including Goa, which is a major draw for British property buyers, but their London office handles UK sales. Chairman Rajesh Goenka says that you only have to look at official figures to see why India property looks set to rival the real estate success story of China: “Currently there’s a shortage of around 20 to 30 million housing units. Each year a minimum of five million units needs to be built up to 2030 to meet the growing demand.”

Goenka says the changing nature of India’s population explains the demand. One quarter of the world’s youth live in India, where 54 per cent of the population is under the age of 25. “Many have lived and worked abroad,” says Goenka: “They return to India wanting a better standard of accommodation that they’ve grown used to and which is currently hard to find.” There are many developers operating in India but Axiom Estates is hoping to gain a reputation for selling only the best. Current developments include Nitesh Forest Hills in Whitefield, Bangalore. In the heart of the IT corridor where many international companies are relocating, this high-rise development is spread across seven acres and contains two- and three-bedroom luxury apartments. Carefully designed blocks are arranged in a criss-cross pattern to maximise light and privacy. On-site amenities include a meditation centre, jogging track, gym, swimming pool, play area plus commercial centre with supermarket. Prices start from £34,335.
 
In another IT corridor, in the heart of Chennai on Old Mahabalipuram Road, Olympia Opaline, will, says Axiom, ‘revolutionise urban living in the city’. Eight towers contain two- and three-bedroom apartments. Set within landscaped gardens that contain water features, Opaline has a wealth of activities on offer including swimming, a Jacuzzi, a bowling alley, tennis, squash, snooker, a crèche, cricket, soccer, badminton as well as a bar, coffee shop and restaurant. Prices start from £54,288.

One of the major players in India, Emaar recently formed a joint venture between Delhi based MGF and Emaar Properties PJSC, Dubai, one of the world’s largest listed real estate companies, to form Emaar MGF. The company may be better known for its Dubai involvement, but it is already responsible for providing India’s largest foreign direct investment into real estate, amounting to over half a billion dollars for projects with a total capital outlay of $4 billion. Projects are planned for Delhi-NCR, Hyderabad, Punjab, Uttar Pradesh, Tamil Nadu and Maharashtra.

On the outskirts of Delhi, Gurgaon is a new suburb, which is now housing the city’s emerging middle classes, many of whom work in its fast growing IT and commercial and retail industries. Chaotic roads full of cars, noise and the occasional cow, give way to newly constructed roads fringed with gleaming tower blocks as you approach the suburb. “The Gurgaon success story arguably rivals that of Dubai and is a symbol of the new India. Property growth rates there have been simply outstanding over recent years and we’re seeing substantial numbers of buyers investing heavily in the area,” says Sebastian Siddiqui of Hamptons’ International, a subsidiary of Emaar that is selling developments here. “We’ve just released the first phase of apartments and villas at The Palm Drive, Emaar MGF’s flagship development in Gurgaon, and the response has been overwhelming.”

Response is good, yet, interestingly, Hamptons is, so far, not selling to foreign property investors but is targeting NRIs, non-resident Indian buyers living in the UK who make up 1.8 per cent of the total UK population, the largest single ethnic minority in Britain at over 1,054,000. “Our Indian property buyers tend to be extremely sophisticated and knowledgeable about the market and we are seeing a strong shift away from their investment in more traditional areas such as the UK, Spain and Eastern Europe. Strong capital growth is obviously a primary factor but build quality, security, accessibility, infrastructure and range of amenities are just as important. Palm Drive provides all of these options,” adds Siddiqui.

Delhi is a clear success story, but further south, the city of Mumbai is fast gaining a reputation all of its own thanks to the influx of business that comes here courtesy of India’s Bollywood industry. Property in the cosmopolitan centre of Mumbai is in high demand and the soaring price of land has forced real estate development out into the suburbs. It is here that developers are building townships for the skilled technicians and management staff seeking affordable accommodation, says Shahzad Bhatti of Landmark International: “India’s rocketing middle class is creating a high demand for residential property and our developers are helping to meet this demand by building townships in the suburbs of India’s financial capital, Mumbai.”

Landmark International is marketing property on a development out of Mumbai, the commercial and financial capital of India, by one of India’s key property developers, Sigrun Realties. Hill View is around 150 kilometres from Mumbai, off the Mumbai-Goa National Highway No.17 and is just five kilometres from a new ‘Special Economic Zone’ where many industries are based. Within easy access of the new proposed international airport, Hill View contains apartments and villas spread over 90 hectares. Sheltered from the pollution and noise of the outside world, this gated development has sporting facilities for all the family, themed gardens, individual parking and a 24-hour security and intercom service. Hill View lies 30 minutes away from the twin hills of Mahabaleshwar and Panchgani, which are known for paragliding, strawberry gardens, horse riding, the scenic Lingmala waterfalls and Vienna Lake. 

Prices at Hill View start from £39,000, with the option of seven per cent net rental guarantee for five years, making it an attractive investment prospect for NRIs and foreign investors according to Bhatti. “Now that the rules restricting foreign direct investment into its real estate have softened, India has become an outstanding investment opportunity with all the potential for capital appreciation and is attracting much attention from canny investors from around the world,” says Bhatti who forecasts property rises of up to 30 per cent over the next few years.

First published in March 2008.
Some information contained within this article may have changed since it was first published. Homes Overseas strongly advises you to seek current legal and financial advise from a qualified professional.