Publications

- September 1, 2010: Vol. 2, Number 8

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Taking Stock of Indian Real Estate: An Overview of 2010 Sector Trends and Long-Term Fundamentals in the Indian Property Market

by Parry Singh, Subhash Bedi and Raj Inamdar

India’s economy has emerged largely unscathed from the global financial crisis of 2008 to 2009. During the past two years, India’s real GDP growth per year has been sustained at 6.7 percent in fiscal year 2009 and 7.4 percent in fiscal year 2010. Given India’s positive growth fundamentals, private equity real estate investors operating in India have been able to generate attractive returns from investments in various sectors, including value-oriented residential housing and budget hotels. In particular, value-oriented housing is the Indian real estate segment least sensitive to global market conditions, with demand buoyed by long-term fundamentals such as rising urbanization, income growth, youthful demographics and a burgeoning middle class with substantial savings and increasing purchasing power.

Despite this fertile terrain for real estate investing in India, prior to 2009 many global investment banks, hedge funds and private equity firms allocated excess capital to

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