Property, Stocks or Gold…?

This is an eternal question that haunts all investors, and people with disposable incomes or deep pockets, in India. In 2005, the Indian Government removed restrictions on foreign investment in Real Estate. This led to a flood of investments from foreign institutional investors, and foreign Realty companies who started investing in partner companies in India. But over the next three years, many of these partnerships dissolved, IPOs did not take off, and litigations became common, leading to a bust in the Indian realty market.

 

However, all that has changed now. The new Government led by Prime Minister Modi has brought in reforms in the Realty sector, leading to an increase in demand for both commercial and residential space. Further, the drop in the Indian rupee vis-à-vis the dollar has made property cheaper for NRIs and PIOs who are investing again in a big way. Industry analysts like Cushman and Wakefield are bullish on India and expect a turnaround in the near future.

 

This can be seen in the number of foreign private equity investors who are making a beeline for India's realty market: Morgan Stanley, Blackstone Group, Canada Pension Plan Investment, APG Asset Management NV in collaboration with Xander Group Inc, Brookfield Asset Management Inc, Walton Street India Real Estate Advisors Pvt and Hines, among others. Nearly USD 675 million has been pumped into Indian realty, in just the first half of 2014 alone.

 

The turnaround in the investor sentiment is obvious. According to a survey conducted by realty portal India Property, out of a total of 2583 respondents, 67 percent of people wanted to invest in real estate, 18 percent in stocks, and 15 percent in gold. But as much as 79 percent of the entire group felt realty was the best long-term investment option. (Source: Financial Times, Indian Realty News).

The upsurge in Indian realty has benefited Realty majors like Mahaveer Group. In the last year or so, the group, which is committed to trust and transparency as its core values, has added several high quality homes, across various price points, to Bangalore’s realty landscape.