Qatar Investment Authority (QIA) is in talks to invest USD 200 million in residential property in India. QIA is holding conversations with Kotak Realty Fund, run by Kotak Mahindra Bank Ltd., which would manage the investments on behalf of the fund.
Sovereign wealth funds and other long-term investors are eyeing opportunities in India’s real estate sector, betting that property prices are bottoming out after slumping this year on the back of the slowest economic growth in a decade.
House sales in major Indian cities, including Mumbai and Delhi, fell 22%. House prices grew by 9%, according to property data firm Liases Foras.
Vikram Gandhi, Founder, VSG Capital Advisers said the timing to invest in Indian property was ideal. “If you have a long-term perspective and you believe that the need for capital in a country is quite high, which it is, and the supply is limited right now because people are not investing, then this is the best time to invest,” he said.
QIA’s investment comes after the Abu Dhabi Investment Authority appointed Kotak to invest USD 200 million in Indian real estate on its behalf. The investments are a shot in the arm for India’s property developers, many of whom are burdened with debt that is expensive to service at steep interest rates.
Banks are also reluctant to lend because of fears of defaults, while private equity funds, which poured in billions of dollars at the height of the property market in 2007, have turned cautious after project delays impacted returns and exits.
@Reuters