Bangalore: Hines India Real Estate Pvt. Ltd, the local unit of a US-based realty firm, plans to venture into residential development and warehousing and logistics, five years after it entered the country and formed a joint venture with DLF Ltd for a project with office and retail spaces.

Hines has built many landmark towers such as the Bank of America Center in Houston and the EDF Tower in Paris.

Yash Gupta, MD , Hines India

The firm will invest additional funds in similar sized, premium projects, said Yash Gupta, managing director and country head, Hines India.

“It is the right time to invest in the residential property market in India as the average price points for residential properties in the metro market have moved up appreciably, though the quality levels delivered are often far from global standards," said Gupta. “We believe the Indian market today is more mature and exposed and is ready for a truly international quality residential project, which we can deliver at competitive price points."

Hines India will also set up a separate warehousing and logistics arm to cash in on a maturing retail market, having developed successful warehousing formats in Brazil and China that it wants to replicate in India.

A number of property firms from West Asia, the US, Israel, Singapore, Thailand and other nations launched operations in India in recent years but their performance has been a mixed bag, according to property analysts. Several of these firms exited India during or after the 2008 economic slowdown and some tweaked their local strategies.

Israel’s Elbit Imaging Ltd and its subsidiary Plaza Centers NV, which is developing a shopping mall in Pune and has a new project in Chennai, said last year it will make fresh investments of at least $500 million to develop real estate projects in India.

But on Wednesday a top Elbit official in India, who didn’t want to be named, said the company is not planning any new project or equity investment in India for a year-and-a-half from now.

Elbit has also revisited some of its project plans since it entered India in 2006, he said. “We will, however, explore joint development opportunities where investments are not high." he said.

Rajeev Bairathi, director, investment advisory, DTZ International Property Advisors, said Indian real estate has its unique share of regulatory and political challenges.

Besides, land acquisition for realty projects is a big hurdle, he said.

When Hines began operations in India it considered a 25,000-acre special economic zone project outside Mumbai but changed tack and decided to focus on moderately sized city-centric projects, Gupta said.

He didn’t give details but said the high cost of debt in India is a concern as is the slow pace of infrastructure rollout.

Among other foreign realty firms still exploring development and investment opportunities in India are New York-based Tishman Speyer Properties and Singapore’s Ascendas, although cautiously.

madhurima.n@livemint.com

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