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Realtors target newer avenues abroad as home market slumps

Realtors target newer avenues abroad as home market slumps
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First Published: Mon, Aug 18 2008. 10 20 PM IST
Updated: Mon, Aug 18 2008. 10 20 PM IST
Bangalore / New Delhi: Property firms are eyeing newer overseas markets for business opportunities as the domestic real estate market continues to slump.
While the looking overseas trend isn’t too new, firms such as the Bangalore-based Puravankara Projects Ltd and Sobha Developers Ltd, and the Delhi-based Parsvnath Developers Ltd are pushing ahead to expand their global presence.
Overseas offices can help in multiple ways. An office in the US, for instance, could help them look for more private equity funds; in China it can help find cheaper construction material; there are potential buyers in Singapore and Australia, which also has possible investors. And in countries such as Sri Lanka and Malaysia, Indian developers are looking to identify properties.
PRA Realty, a property developer from Pune, which is pumping in nearly $100 million (Rs432 crore) into three township projects in Nagpur and Pune and Nashik, has set up an office in Chicago with a new chief financial officer (CFO) based there.
“The idea is to interact with US-based funds there, raise capital and explore business opportunities,” said Rustom Bharucha, managing director (MD), PRA, which also has a marketing office in Dubai.
Traditionally, Indian developers have been opening marketing and sales offices in the United Arab Emirates, particularly in Dubai, with builders such as Hircon Llc., Ajmera Housing and more recently, Omaxe, constructing projects there. But developers such as Parvsnath, Lodha Group, Sobha and Puravankara are also moving in on new locations, such as South-East Asia and China, as well as traditional locales such as the UK and US.
Sobha, for instance, gets much of its raw material and interior fittings, such as tiles and silicate boards (used in bathroom ceilings) from Guandong, on the southern coast of China, where it has set up an office. In 2007, Sobha estimates, it imported material worth Rs2.5 crore from China, a number that is expected to rise sharply.
“As a company expands across cities, it is important to have a presence internationally so that people know about your products. We are planning to open offices in Australia and Singapore besides the US and UK in the near future,” says J.C. Sharma, executive director of Sobha. The firm is expanding in India by launching projects in Pune, Coimbatore, Kerala and Mysore.
Parvsnath is in talks with a Singapore-based real estate firm for a hospitality and real estate joint venture. The Indian developer has already set up a subsidiary for its Singapore operations, Parsvnath Developers Pte Ltd, and would soon set up offices there. The firm expects to develop at least one five-star hotel there. “We are talking to real estate firms there for partnerships,” Pradeep Jain, chairman, Parsvanath, said at a press conference to announce its fourth quarter results. “Singapore market is very transparent and well organized. Margins in Singapore are almost same as in India.”
Puravankara has just opened an office in Sri Lanka. The company plans to launch a 300-super luxury villa project on 26 acres near Colombo. “We are in the last leg of approvals for the project. We have appointed representatives in the UK and US,” says Ravi Ramu, CFO.
Non-resident Indians, or NRIs, buy 15–25% of all new real estate developments in India, depending on the location and the project, claims a recent report by Jones Lang LaSalle Meghraj, a global real estate consultant. While NRIs from the UK, Canada and Dubai have been investing in Indian real estate, those from Singapore, Hong Kong and Thailand have now started buying properties here, says Raminder Grover, managing director, Homebay Residential (a subsidiary of Jones Lang LaSalle Meghraj).
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First Published: Mon, Aug 18 2008. 10 20 PM IST