The Indian real estate company Sigrun and a leading Israeli firm are in talks over a deal worth more than five hundred million dollar, as said by knowledgeable sources.
Most of Sigrun’s activities (95 %) are in residential property and the rest in office rentals, according to CEO and controlling shareholder Rajesh Nair. He said that the company’s profit in preceding FY was fifteen million dollar, and if everything goes as planned, this year it will be forty million dollar.
Sigrun is examining different possibilities for cooperating with Israeli companies. One main Israeli firm, which has not expanded into the Indian market so far, expressed interest in continuing the contacts with Sigrun, and the latter has hired a leading Tel Aviv law office to facilitate the proceedings.
In a discussion with TheMarker, Nair pointed out that his company has construction-ready building plots in India worth five hundred million dollar, in addition to 100 apartment units in different stages of construction. He said that the discussion here have not yet reached the stage of precise numbers and percentages.
Nair stressed that any Israeli partner must have international exposure, since Sigrun has not yet ventured away from India, while many Israeli companies are active in the world real estate market. He said he is looking for a company that can bring to the table technologies and planning capabilities that Sigrun lacks at this time, while Sigrun can contribute its proficiency in the Indian market to the Israeli partner.
Only a few Israeli developers - including Electra Real Estate and Azorim, and Elbit Imaging - are involved in construction in India.
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2 Comments
India has “enormous potential in all its property investment categories”. Strong population growth, a large pool of qualified workers, greater integration with the world economy and increasing domestic and foreign investment are fuelling demand for office, retail and residential property. India’s burgeoning middle class will drive up nominal retail sales through 2010 by 10% p.a. At the same time, organised retail is becoming more important. At present organised retail accounts for a mere 3% of the total; by 2010 this share will already have reached 10%.India is the prime destination for IT services outsourcing. In the coming five years, at least 55 million m² of extra office space must be completed in the premium office segment alone. Property investments in India are not risk-free. Market transparency is far behind European or US standards. It is therefore vital for foreign investors to have a professional local partner. The lack of liquidity and upward pressure of pricing remain the main concern within the market.For more view- realtydigest.blogspot.com
But is that good for Indian real estate level?
My be it could be the negative impact of the real estate market..