Real estate funds bullish on cities like Coimbatore

Real estate funds bullish on sector's growth.

Funds plan to invest aggressively

Real estate funds are bullish about India’s fast growing real estate sector. Kshitij Investment Advisory Co Ltd, an asset management arm promoted by the Future Group, is looking at investing $430 million in setting up 14 'market cities’ in metroes. Besides, Kshitij also manages two funds such as Kshitij Domestic Fund with a corpus of $80 million and Kshitij Horizon International Fund with a corpus of $360 million. Both these funds are looking at creating retail infrastructure which includes setting up malls in 13 locations in India. Sanjeev Das Gupta, CFO & head investments, Kshitij Investment Advisory Co Ltd says, “While Kshitij Domestic Fund will focus on retail led mixed use development, Kshitij Horizon International Fund will create large format malls in India. As for market cities, each city will be spread across an area size of 25 acres for commercial office space, retail malls, apart from land large enough for open spaces.”

Similarly, Reliance Urban Infrastructure Fund is looking at investing Rs 1,500 crore in Phase I to develop commercial office spaces apart from 50 malls in 50 cities. CIG Fund of Unitech Ltd is targeting Rs 1,000 crore of sales through the IT ITES sector, industrial parks, healthcare and commercial offices by 2010. Besides this, UK Reit, Sun Apollo, Castlerock, Indiabulls, Saffron, Morgan Stanley, Kotak, JP Morgan, AIG and Bargman Holdings are also ready with their plans to invest between Rs 500 crore to Rs 1,000 crore each in the sector through the joint venture route, for which they are currently in the process of identifying the right partner. Joy Sanyal, vice president, infrastructure and urban development, TrammellCrow Megharaj explains, “The demand for commercial office space and retail from Tier I cities will continue to grow provided they remain competitive with Tier II cities offering good incentives for players to come in alongwith attractive values. Hence, Kochi, Coimbatore, Ahmedabad, Jaipur, Bhubaneshwar, Bhopal, Raipur and Indore have the potential to emerge as major IT- ITES destinations.”

According to industry experts, by 2010, one million people would be employed in the IT/ITES sector alone. In 2006, software exports was to the tune of $24 billion and domestic was around $6 billion, and is likely to increase substantially, spurring the demand for commercial offices.
Source: The Financial Express

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