DELHI: Global investors in real estate are skipping India and moving to countries like Indonesia and China to make investments, as issues such as regulatory framework and returns are still a matter of concern here.
'“India, China and Indonesia are all markets with strong underlying growth. However, from an investor standpoint, they (the investors) look at various parameters such as transparency, returns, legal protection among other,” Colin Dyer, President and CEO of real estate brokerage and consultancy firm Jones Lang Lasalle, told Business Line.
“In that sense, India still lags behind. India is considered a high-risk market. India needs to up its transparency quotient.”
Asked about the investment in real estate, Dyer said: “We expect a modest 10 per cent increase in overall realty investment.
“The money will flow into countries which are risky but have high returns and emerging economies.”
Dyer said several private equity players are keen to invest in India, but their earlier experience has been mixed.
“Private equity firms seek stable assets. There is lot of appetite in the completed office space, especially in the top eight cities. The tier 2 and 3 cities really haven’t developed the way they should have been,” he added.
Speaking on the trends in the realty segment, Dyer said globally the realty market is improving.
“In India, the growth has been rather flat. We hope we will see some momentum in the sector after the general elections in 2014.
“Despite policy changes such as allowing FDI in retail, it hasn’t really translated into huge space absorption,” he pointed out. He added that residential will continue to see growth in terms of offtake.
Asked about the introduction of Real Estate Investment Trust (REIT), Dyer said it is a step in the right direction.
“The Indian Government has taken the best international practices. REIT will bring in the much needed transparency and also restore investor confidence, both domestic and international,” he said.