Bangalore realty draws investors from Russia

 

Russian investors comprising property developers, industrialists, and high net worth individuals expressed interest in investing in the city's realty market, at the recently-held World Congress Meet of FIABCI at St Petersburg. At the meet, attended by over 800 delegates comprising developers and investors, the city's potential in the infrastructure, hospitality, retail and integrated township segments drew interest.

"A group of investors from a few European countries are visiting Bangalore later this month to evaluate properties here. They are keenly interested in investments in commercial spaces, integrated developments and in the hospitality sector", said Farook Mahmood, Vice President - World Council, FIABCI, who addressed the meet.

The investors are looking at entering the domestic market through the FDI route, with a special purpose vehicle (SPV) set up to bring in the investments with a strategic partner here. "India has a tax treaty with Cyprus and the Russian investors don't need to pay tax twice if they use this route. Many Russian developers and investors have invested large amounts of money in Cyprus. These companies are also registered in Cyprus and get a tax holiday. This is a huge advantage for the Russian real estate companies that works well for us too", explains Farook.

Later, at a meeting held at the Russian parliament house, Duma, Ivan Grachev, Minister of Energy, evinced interest in the city's IT and real estate sectors. "The minister enquired about the housing situation in Bangalore and how joint development projects in the residential segment work. He also evinced interest in the public-private partnership model in the development of social housing", said Farook.

The FIABCI meet was aimed at promoting investment opportunities in member countries. It brought together developers and investors to explore new vistas. "Russian investors have been pumping in millions of dollars in the property markets of Dubai, Paris and New York. This meet helped push the city's realty market. They were happy to note that property in India, especially Bangalore, yields over nine percent in rentals, and grows by over 20 percent annually", said Farook.

Investments from Russia will work well for the construction industry in the city. Also, realtors here can leverage the referral model to expand their business activity to foreign markets. Property investors across the country will have more options to park funds in too.

Integrated projects hold potential with more emerging localities around the city opening up for development. Large format commercial and residential projects hold potential with more business houses planning to set shop in the city. The city's skyline is expanding on all sides and there is scope for more realty development, especially with the planned commercial belts around the city.

The connectivity with the extensions of the Metro Rail lines, and planned development of arterial roads and highways, will mean large land parcels opening up for industrial belts. This will open up a market for the hospitality, retail and infrastructure sectors in a large way. With the city drawing more entrepreneurs and a growing realty market, this is the right time for investors from abroad to plough funds in.