India Post News Service

NEW YORK: Targeting the burgeoning market for Indian Americans investing in India's $15 billion real estate sector, leading Indian real estate developer, Ansal Housing, has set up a North America associate sales office in New York.The New York office will serve as a conduit for attracting investments into Ansals residential as well as commercial real estate projects across India.

The announcement was made by senior officials of New Delhi-based Ansal Housing and its US partner Goodwill Capital, at a press conference at Mint restaurant in Manhattan on Oct 12. The New York office will also liaison with Ansal appointed brokers and agents in North America, targeting all geographical regions with a substantial Indian American presence.Ansal developers, who have successfully built 65 million sq ft of residential and commercial spaces in India, crossed the 200 crore rupee annual turnover, with projects running in 22 cities from Jammu in the north to Bangalore in the south.

"It was based on feedback from potential investors in the US, whom we met during property shows in the last 6 months, that we decided to open up offices here - to put a face to us through an associate," said Karun Ansal, Vice President, Ansal Housing.With India's real estate market returning record profits, Ansal officials said the timing was opportune for the company to focus on the sizeable Indian American market.

"Property prices in India are rising fast, and not just in the big cities. As the tech boom spreads across the country, as more Indians buy homes, and as the economy grows at faster than 8 percent a year, real estate is attracting more investors, many of them from abroad," said Ansal.Investors can expect a whopping 20-25 percent appreciation on their investments and at least a 10 percent increase in rental returns, Ansal said.Ansal explained how the Indian government was encouraging NRIs to invest in properties in India.

"The NRIs can invest in both residential as well as commercial properties in India," he said. "There is also no restriction on the maximum number of properties that can be bought. NRIs also get full support for the finance required for the purchase of the properties," Ansal added.The Ansals are in the process of tying up with banks for financing NRIs who want to invest in their properties. With involvement of banks not only to finance investors but also the developers, NRIs need not worry about transparency and accountability, the Ansals assure.

According to India's new FDI policy, up to 100 percent investment is allowed under automatic route in townships, housing, built-up infrastructure and construction-development projects. Construction projects would include hotels, resorts, hospitals, educational institutions, housing and commercial premises.

The government has also reduced the minimum mandatory area to allow FDI in real estate sector from 100 acres to 25 acres.Ansal officials said that real estate prices in India's metropolitan cities will grow between 10-15 percent while 20-25 percent in small cities during the next 1-2 years. Ansal Housing forecast this growth despite claims that property market in India was overheated. "During the development of real estate in Agra and Indore by our company, we observed that the real estate prices in these areas have increased by 20-30 percent respectively," Ansal noted.

"The real estate sector in India is attracting huge investments. Private equity players are considering big investments, banks are giving loans to builders, and financial institutions are floating real estate funds."Ansal Housing has also announced it was developing a residential township in Karnal, Haryana, on a 99-acre plot of land, involving an investment of 150 crore rupees.

The company also has plans to develop such townships in Sirakpur, Jammu, Kurukshetra, Penchkula and Yamunanagar in the near future. Having posted a revenue of 200 crore rupees in 2006, the company expects an increase in total revenue by 60 percent in fiscal 2007."In order to improve and maintain the quality of services to our NRI customers, Ansal Housing is committed to quality construction, completion of projects within the promised time-span and maximum possible transparency in our operations," said Ansal.

"We have also tried and improved our various policies and procedures over the period to become more customer-friendly in our policies, approach and initiatives."The real estate story in India is reaching amazing levels of recognition as more foreign funds made an entry into India. An expected $10 billion worth of foreign direct investments is envisaged for the Indian real estate sector.

According to Merrill Lynch, India's real estate market is expected to touch $90 billion by 2015.Experts say that more than the trend of real estate returns being triggered from within, it is the pressure from NRIs and global market players that is prophesizing the future of the real estate boom in India. Real estate has come on top in terms of interest shown by overseas Indians, especially in North America."Real estate in India is attracting NRI investors not necessarily for speculative purposes, but to acquire strong assets that will give good returns," said Manmeet Sikka, President of Goodwill Capital, Ansal Housing's US partner.

The most favorable route for NRI investments is to participate in a variety of infrastructure projects like roads and bridges in urban areas, construction of residential and commercial projects, development of townships at city and regional level and investment in participatory ventures, officials said.NRIs can fund investments through their own funds by using inward remittance from overseas, income earned overseas or personal savings outside India, or funds held in non-resident external (NRE) or non-resident ordinary (NRO), or foreign currency (non-resident) (FCNR) bank account for purchasing real estate in India.