With government policy of 100% tax exemption for a decade from central exercise and income tax exemption for next 5 years, housing and building companies are competing to develop virgin lands of Dehradun.

Although the real estate developers are fine with the government’s policies on real estate yet they want government to be more flexible.

In its report titled ‘UK-India Cross-Border Investment’, JLLM, which will market Berkley’s units in India, said that Indians could crack up 20,000-30,000 residential properties in UK over the coming ten years.

The property consultant said this is the correct time to invest in UK as house prices are expected to fall by twelve percent this year and by a further 6-8% in 2009. However, they are likely to go up by 8-9% per annum during 2010-13.

Raminder Grover, managing director, Homebay Residential (a JLLM subsidiary), said, “UK-based developers are highly interested in attracting investors from India. They are aiming not only the high-net individuals, but also the upper-middle segment. The UK represents a very amenable market for Indian investors the British pound is far more stable than the rupee, there is far greater clearness in the UK real estate market.” He said UK tenants sign long leases of up to twenty five years and their long-term income generation capacities are really stable, not to forget the London Olympics in 2012.

The number of Indians with financial assets of more than one million dollar is likely to grow to 400,000 from the current 123,000, with total wealth of $1.7 trillion, the broker forecast.

Their investments in the UK may be limited by India’s $200,000-a-year ceiling on capital outflows for resident Indians, it said.

“Indians could potentially own 20,000-30,000 UK residential properties over a 10 year horizon and UK-India cross border Investment is all set to grow to 10-15 billion pound by 2018,” the latest Jones Lang LaSalle’s report titled ‘UK-India Cross-border Residential Investment’ said.

The report further highlighted the fact that with no restrictions on Indians investing in UK residential property and strong house price growth, the market would continue to see the current investment size of 0.6-1.2 million pound grow exponentially over the next decade.

Indian investors are particularly interested in UK property market as it offers greater transparency, long leases of up to 25 years, long-term income generation capacities are stable, the London Olympics in 2012 being in vicinity.

Beside steel czar Laxmi Mittal, who has bought a number of homes in the past couple of years, there has been a growing tide of lower-profile purchases by Indians.

The combined value of the three properties owned by Mittal family on London’s Kensington Palace Gardens is said to be valued at about 440 million pounds.

The number of such Indians with the propensity to invest in the UK residential market is likely to increase to 583 million by 2025 coupled with another 400,000 High Net Worth Individuals (HNWIs) by 2017.

The price hike was “inevitable” because steel was dearer by 24% compared to its January level and cement prices were up 56% from the beginning of the year, Balakrishna Hegde, the president of the Karnataka unit of the Confederation of Real Estate Developers’ Associations of India said. The revision is the first of what could be a series of increases in the rates of residential properties.

CREDAI’s state chapter groups 124 real estate firms and includes the top property developers in Karnataka.

“Rising input costs have affected the cost of construction very harshly, increasing development costs by 20%-30%, depending on the stage of construction. Our members will increase prices by Rs 75 to Rs 500 per sq ft based on the location and the stage of construction,” Mr Hegde said.

The revision is the first of what could be a series of increases in the rates of residential properties as commodity prices escalate, pushed higher by soaring oil prices.

“What we are passing on is only a small portion of the increased cost of construction. We do not want to pass on the entire burden to at this stage, but will review the situation and take appropriate steps in the coming months,” he said.

Fitch said in a release that the ratings assigned denote that the company’s financial leverage has improved substantially over the last two years.

The rating takes into account the company’s experience in the real estate market in Northern India. While API plans leasing commercial and retail properties, a majority of its current revenue is from the sales of residential properties, it said.

Wealth matters
A person investing for his own use is usually ready to commit between Rs 25 lakhs to Rs 75 lakhs for apartments or housing sites. Flats are the safest choice since a reputed builder can deliver the goods without problems and the money invested is in trusted hands. If the NRI investor has a trusted family member to negotiate a land agreement and the building of the house, it is a considered choice.

Wooing investors
The newly finished India Property Show in September 2004 across the USA showcased the projects of developers in Bangalore, Chennai, Hyderabad, and Nagpur. The show showed a range of residential properties together with developed plots, luxury apartments, villas, and profitable properties. Buyers could get spot pre-screen permits from a bank and property organization companies offered specialized services to supervise the properties of NRIs in their absence. Lectures held everyday gave insights into current regulations and guidelines pertaining to real estate for potential buyers.

Md Ali Alabbar, Chairman, Emmar Properties, told the reporters “The Indian economy is growing and there is a shortage of housing units here. I guess it gives enough opportunity for all of us”. It is well-known that Emaar MGF is a joint venture between Emaar Properties PJSC of Dubai and MGF Development Limited of India. . The Dubai-based realty major has 41.9 per cent stake in the joint venture, while MGF Development Ltd of India has 53.3 per cent stake in the company. Emmar MGF has recently diluted some stake to IFCI at the upper band of the issue price.

Mr. Shravan Gupta, Executive Vice Chairman and Managing Director, said “Out of the total land, we have already paid for 89 per cent of the land. As much as 47 per cent of the land belongs to the state capital region, 34.5 per cent in the National Capital Region and the remaining in other places”. Further he added that the company has now presence in 26 Indian cities, which is set to be spread out to 40 cities once work on the projects starts.

On December 31, 2007, Emaar MGF had land reserves across India. It has 13024 acres of land out of which it has development plans for approximately 12,028 acres, which can provide it a saleable area of approximately 566 million square feet.

The company estimates that on December 31,2007 its land reserves will provide it with a proposed saleable area of approximately 136.5 million square feet of plotted residential development; 318.8 million square feet of built up residential properties; 88.9 million square feet of commercial properties; 18.0 million square feet of retail properties; and 4,960 keys in hospitality properties.