Property builders explore overseas real estate prospects

Property builders explore overseas real estate prospects

Bangalore: India’s property companies are exploring opportunities in neighbouring nations including Sri Lanka and Bangladesh as the governments, seeking to boost economic growth, are providing incentives to develop infrastructure.

The property developers are taking up new projects outside India again after the global financial crisis that started in 2008 disrupted the projects that local developers announced in places such as Dubai, Bahrain and Malaysia.

“While many developers are evincing interest, they are looking at less capital-intensive projects, eyeing partnerships with local realty firms or strategic alliances with local governments, instead of investing heavily on land buys," said Ashutosh Limaye, associate director, strategic consulting, Jones Lang LaSalle, a property advisory.

Bangalore-based builder Puravankara Projects Ltd has renewed interest in Sri Lanka’s capital city of Colombo, after the nation’s civil war ended and the government invited real estate investments into the country.

Puravankara’s budget housing unit Provident Housing Ltd is scouting for suitable land parcels in the island nation. The company has also changed its plans for its proposed villa project with a mixed-development project on a 25-acre plot that will include commercial as well as residential buildings.

“We are pursuing Sri Lanka as part of our growth story and there is political will to provide the right infrastructure and incentives," chief executive Jackbastian Nazareth said. “We have a long-term strategy and we will look at multiple projects with the right product mix as the country is seeing a boost in housing, hospitality and IT development."

Limaye said most developers are beginning with a project or two to get a feel of the market and then formulating a larger, long-term business plan.

Tata Housing Development Co. Ltd is building a large housing project in Maldives in partnership with the government.

“The project is in the planning stage. Once it is built, Tata Housing will hand over a portion back to the government," a person familiar with the development said, requesting anonymity.

The company is also looking at Sri Lanka as a potential market. A Tata Housing spokesman didn’t respond to an email seeking comment.

Another Tata company, Tata Realty and Infrastructure Ltd, is expected to partner with Maharashtra Housing and Area Development Authority for building affordable homes in Sri Lanka.

“The project is awaiting a green signal from the Maharashtra government," said a Mhada official, who declined to be identified because he is not authorized to speak to the media.

“There is also interest in Bangladesh, which is seeing a housing boom of sorts, and Nepal," said Limaye.

Officials of a real estate firm with projects in Kolkata visited Dhaka twice and are looking at housing projects there.

“We are keen to do housing projects there as there is big demand, but there are issues regarding getting clear land titles, which we are sorting out," said a company official, who spoke on condition that neither he nor his company be named as the talks are at a preliminary stage.

The initial euphoria about West Asia, predominantly in markets such as Dubai and Bahrain, hurt many developers back home with the financial slowdown bringing real estate activity to a halt.

Hiranandani Developers Pvt. Ltd, which started 23 Marina, a residential project in Dubai in 2006, is yet to be completed. The project has seen a slowdown in sales, fall in prices and delays as the city went through an economic turmoil. Chairman Niranjan Hiranandani said the project is slated to finish in the next four-six months.

Ajmera Group and Mayfair Housing (P) Ltd’s project in Bahrain, HBS Realtors Ltd’s luxury housing plans in Dubai and the withdrawal of Omaxe Ltd from Dubai are among ventures that failed to take off.

HBS managing director Sandeep Shah said the project fate was “a blessing in disguise".

Sunil Mantri chairman of the eponymous Sunil Mantri Realty Ltd said it has put its maiden overseas venture in Malaysia on hold.

In 2008, Mantri had announced a $100 million investment to develop, construct and market a cyberport (similar to an information technology special economic zone) in Johor, Malaysia, in a joint venture with the Malaysian government.

Devesh Chandra Srivastava contributed to this story.