Private equity funds give Punjab realty sector a miss
Private equity funds are reluctant to fund real estate projects, as the Punjab real estate market is dominated by local developers, the majority of whom are in the unorganised sector
Sep 26, 2014
Source : Business Standard
Private Equity

 

Chandigarh: Private Equity (PE) investments in Punjab's real estate projects were negligible as low returns on such projects and a decreased presence of organised players in the state were keeping equity funds away from the market, experts said on Thursday.

"The Punjab real estate market is dominated by local developers, the majority of whom are in the unorganised sector. Furthermore, there are very few organised players in the Punjab market as compared to Delhi-NCR, Mumbai, Banglore, Pune and Chennai, among other cities. Hence, private equity funds are reluctant to fund real estate projects. Above all, we have seen there has been a delay in project execution by these developers. Such factors are behind the non-presence of private equity funds in the Punjab market," Rubi Arya, vice-chairman & director, Milestone Capital Advisors, told Business Standard.

Arya said another reason was that many high networth individuals from Punjab were investing in real estate projects in developed markets such as Delhi-NCR, Banglore, Chennai and Pune, among others, through milestone funds, as they were getting better returns compared to past investments.

Experts said was more guided by an anticipation of profit. With the possibility of the new government driving the economy more, PEs were positive about India, especially about the real estate market in metro cities which are still untapped compared to tier-II and III cities.

As far as Punjab was concerned, the real estate situation mirrored the scenario prevailing in the rest of India. While realtors were finding it tough to bring down prices, customers were expecting a correction. This had virtually brought the real estate market in Punjab to a standstill.

"We don't mind taking PE funds, provided they are competitive compared to banks. Moreover, the cost of funds and their selection criteria is very tough. Probably, this is one of the major factors why many developers don't qualify for seeking funds," a local developer said on the condition of anonymity.

Latest Realty News

Law ministry proposes to set up 1800 fast-track courts for land, property, heinous crime cases
Sep 26, 2014
The law ministry has proposed setting up of 1,800 fast-track courts across the country to speed up disposal of cases pertaining to land acquisition and property disputes besides those involving heinous crimes
E-commerce firms leases 6 lakh sq ft warehousing space in H1
Sep 25, 2014
The boom in India's e-commerce sector has led to increase in demand for warehousing space from online retailers which leased about 6 lakh sq ft area in the first half of 2014, according to property consultant CBRE
Real Estate Investment Trusts will get investments, no need for more sops, say Officials
Sep 25, 2014
Real Estate Investment Trusts will help attract more funds into the realty sector and there is no need to provide more tax concessions for it, a senior government official said
Stop-work notice to green belt building with 718 flats
Sep 25, 2014
The Noida Authority served a notice to developer Horizon Concept Group for building a 14-storey housing project on a green belt in Sector 86, asking it to immediately stop construction work
Property tax: Welcome step, but not enough, stakeholders say
Sep 25, 2014
The Punjab cabinet's decision to revise criteria for property tax has enthused residential property owners but there is still demand for more across the board relaxations, irrespective of the size of the dwelling unit
Woman alleges land grab with fake deed
Sep 25, 2014
A 45-year-old woman and her family members lodged a complaint with the economic offences wing, alleging usurping of 45 acres located at Mahura Mouza in Khurda district
Affordable housing will drive growth in realty sector: Govt
Sep 25, 2014
Housing policies for affordable housing will be the driver of reviving growth in the realty sector, a senior government official said
Property portal CommonFloor raises $30 million
Sep 25, 2014
Online real estate portal CommonFloor has raised $30 million (over Rs180 crore) in its fifth round from existing investor Tiger Global
Mumbai slips to 10th position in terms of rentals, says report
Sep 25, 2014
The realty sector slowdown and lack of business confidence have brought Mumbai down to the 10th position this year, among the top 15 global cities, in terms of office rentals
Real estate sector set to gain after licensing made mandatory for all brokers
Sep 24, 2014
The onset of the new Real Estate Regulatory bill has created a stir among the customers, developers and brokers as it seeks to bring forth phenomenal changes in the real estate sector

Latest Realty News Of State

Realty Talk's