Tag Archives: RK Chopra-IACC

Opportunities for US companies in allied sectors of realty

Posted on by Track2Realty

By: R K Chopra, Secretary General, Indo-American Chamber of Commerce

RK Chopra-IACC, India real estate news, Indian realty news, Property new, Home, Policy Advocacy, Activism, Mall, Retail, Office space, SEZ, IT/ITeS, Residential, Commercial, Hospitality, Project, Location, Regulation, FDI, Taxation, Investment, Banking, Property Management, Ravi Sinha, Track2Media, Track2RealtyTrack2Realty Exclusive: The Government of India envisages one trillion dollar investment in all areas of infrastructure in the 12th five year plan (year 2012 to 2017).  The Government wants fifty percent of this investment to come from the private sector participation and most of these projects are expected to utilize the Private – Public partnership (PPP) model.

The Secretariat for Infrastructure in the Planning Commission is involved in initiating policies that would ensure time-bound creation of world class infrastructure delivering services matching international standards, developing structures that maximize the role of PPPs and monitoring progress of key infrastructure projects to ensure that established targets are realized.

While presently only architects licensed by Council of Architects (COA) (www.coa.gov.in) are authorized to practice in India, foreign firms usually pair up with Indian firms to take advantage of the country’s real estate boom.

Major upcoming opportunities for U.S. firms include the seven technology townships associated with the development of the Delhi Mumbai Industrial Corridor (DMIC). As recently as last year, Godrej hired DP Architects of Singapore to design their 50-storey residential project in Mahalaxmi area of Mumbai. US-based Hellmuth Obata Kassabaum Inc (HOK) has already worked with Indian builders such as Unitech, DLF, Hiranandani and many other big firms.

The Indian construction industry has noted the US practice of leasing equipment and has begun to follow suit. India’s first construction equipment bank, “Quipo”, was established in March 2002 for the purpose of leasing high-value multipurpose, specialized and general-purpose infrastructure equipment.

Ingersoll Rand of the U.S., along with Indian Infrastructure Equipment Ltd (IIEL) and the IFC, has established an equipment bank in Gurgaon, near New Delhi.  They are also developing a second hub, NAC Infra Equipment Ltd (NACIEL), in Hyderabad. NACIEL is a joint venture of the National Academy of Construction with IIEL, L&T Finance Ltd. and Nagarjuna Construction Ltd.

IACC, Indo American Chamber of Commerce, RK Chopra-IACC, India real estate news, Indian realty news, Property new, Home, Policy Advocacy, Activism, Mall, Retail, Office space, SEZ, IT/ITeS, Residential, Commercial, Hospitality, Project, Location, Regulation, FDI, Taxation, Investment, Banking, Property Management, Ravi Sinha, Track2Media, Track2RealtyUntil recently, the GOI’s industrial policies only encouraged public sector investment in major industrial and infrastructure ventures. Now, private engineering and construction firms are allowed to bid for large government projects.

This significant policy change has increased the demand for advanced equipment since transportation, urban and housing infrastructure are key areas of construction.

The way forward to US investment in Indian realty

Posted on by Track2Realty

By: R K Chopra, Secretary General, Indo-American Chamber of Commerce

IACC, Indo American Chamber of Commerce, RK Chopra-IACC, India real estate news, Indian realty news, Property new, Home, Policy Advocacy, Activism, Mall, Retail, Office space, SEZ, IT/ITeS, Residential, Commercial, Hospitality, Project, Location, Regulation, FDI, Taxation, Investment, Banking, Property Management, Ravi Sinha, Track2Media, Track2RealtyTrack2Realty Exclusive: The opening up of retail in multi-brand and single brand is likely to push up the demand for more space throughout the country.  On a rough estimate, this sub-segment needs, over the next few years, close to 20 million sq feet of space, which have to be built in accordance with the international standards.

Creation of such additional space with the state of the art facilities and comforts would require an investment of US$ 15 billion in the next few years.  That could be realized only through direct investment by foreign companies or through joint ventures.

That is not all.  The latest in the mall technology dictate that its growing power needs could be met by tapping non-conventional sources like solar energy.  Micro-grids, which are now being popularized in India for tapping alternative energy in large conglomerates like shopping centres, malls, multiplexes can help running on both conventional and non-conventional energy and at the same time enable the entity to feed the excess energy generated to the main grid.

This would be an additional source of income for such establishments besides reducing their dependence on conventional sources of energy.  The US energy companies, which are world leaders in smart grid and micro grid technology, can be successfully a partner in this effort.

RK Chopra-IACC, India real estate news, Indian realty news, Property new, Home, Policy Advocacy, Activism, Mall, Retail, Office space, SEZ, IT/ITeS, Residential, Commercial, Hospitality, Project, Location, Regulation, FDI, Taxation, Investment, Banking, Property Management, Ravi Sinha, Track2Media, Track2RealtyGovernment’s plan to promote SEZ’s was a conscious effort to create world class manufacturing hubs in the country.  On account of the slowdown, this imaginative scheme was put in the backburner.

Many important companies, which indented to commence SEZs have either vacated the field or postponed their launch due to a variety of reasons.  There are some US companies, which are interested in investing in these areas.

They may naturally look forward to have some assurances from the government, such as hassle free land and approvals, relaxed labour laws, easy financing options, relaxed norms for buying land, easy exit routes, inputs at affordable prices, and of course, a sustained and long term policy.

The realty sector is expected to grow at 30 per cent annually to become a US$180 billion industry by 2020.  To achieve the target, a focused, flexible industry friendly policy is needed.

The US continues to be the largest investor in India.  To motivate them more in the overall Indian industrial segments and particularly in the realty sector, it is important to fast track the proposed bi-lateral investment treaty between the two countries, which should spell out the easy investment norms, particularly in the real estate sector. That will be a win-win situation for both countries.

What deters US investment in Indian realty

Posted on by Track2Realty

By: R K Chopra, Secretary General, Indo-American Chamber of Commerce

IACC, Indo American Chamber of Commerce, RK Chopra-IACC, India real estate news, Indian realty news, Property new, Home, Policy Advocacy, Activism, Mall, Retail, Office space, SEZ, IT/ITeS, Residential, Commercial, Hospitality, Project, Location, Regulation, FDI, Taxation, Investment, Banking, Property Management, Ravi Sinha, Track2Media, Track2RealtyTrack2Realty Exclusive: Why the US investors are shying away from investing in India? Primarily, it is the fear of change in policy as they had experienced in the past.  Lack of significant growth is also another factor that is working against their investment in the Indian realty stocks.

The high interest rates, equally high levels of premium, absence of a uniform policy in housing, recent difficulties in the land acquisition etc. are factors, which are affecting the investment and lack of enthusiasm among the PE investors to focus on India.

We have to evolve a stable policy and at the same time that policy should be transparent and comparable to those in other countries.  This can renew the interests of the foreign investors in the realty stocks and bring in the required resources for boosting the sector.

Private equity funds invested close to US$ 1.7 billion in 2011.   However, FDI in real estate in 2011-12 (April-January) has reached only 492.5 million.  Given proper encouragement and direction, this could go up to US$ 5 billion by 2014.  Of course, our financial system should be re-tuned to absorb the excess inflow of dollars on account of the relaxed PE investment norms.

The other area is to relax the rules for foreign investment in projects beyond townships and satellite towns. Such projects entail huge investment and acquisition of huge tracts of land, which is cumbersome and dilatory in the present situation.

RK Chopra-IACC, India real estate news, Indian realty news, Property new, Home, Policy Advocacy, Activism, Mall, Retail, Office space, SEZ, IT/ITeS, Residential, Commercial, Hospitality, Project, Location, Regulation, FDI, Taxation, Investment, Banking, Property Management, Ravi Sinha, Track2Media, Track2RealtyMuch awaited land acquisition bill is still under debate.  Moreover, foreign investors like to test the waters with smaller investments before getting into bigger ones.  It is important to ensure early passage of the bill and also to allow equity participation in smaller housing projects.

There is an economic rationality for such policy since some of the real estate companies in India are facing huge resource crunch.  Joint ventures and collaborations will help them to shore up their bottom lines.

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