Indian firm to spearhead luxury villas development
By Paul Imbesi
WESTPORT, Conn. – Westport Capital has announced that it is developing a $100 million residential real-estate complex in the southern Indian city of Hyderabad. The project will be completed in a deal with an Indian real estate development company.
The project is scheduled to occupy 60 acres of land and will contain over 300, 3,500-square foot upscale villas. Westport said it has already reserved several units for sale. The company is targeting private owners. According to a spokesperson from Westport, the villas will take four years to build and the project includes several phases.
According to the spokesman, the company is going to work with the Indian real estate developer Alliance Infrastructure Pvt. Ltd. Alliance is involved with other real estate development projects in Indian cities such as Bangalore and Chennai. On its Web site, Alliance states that it wants to become “the world’s largest real estate developer with annual revenues of $10 billion” by 2025.
Westport is an independent financial services company that works as an investment advisory company, as well as an independent broker and dealer. Its primary business is portfolio management or brokerage services to individual and institutional clients. The company is based in Westport, Conn., and has offices in Mumbai, as well as Los Angeles.
This is also not the first time that Westport has worked in India. Several months ago, Westport committed capital to a private deal that cannot be disclosed, according to the company’s spokesperson. He said Westport is also looking into a dozen other transactions in India, but that does not mean the company will close all of them. He added that his company thinks highly of India, its economy, prospects and people, and hopes the company will be able to grow as the country continues to grow.
Westport’s spokesman said the company was attracted to Hyderabad because it is a great city with a lot market potential. Westport felt there was a need and demand for luxury-oriented villas in the city.
Hyderabad has about 6 million people and had a job growth rate of 18 percent in 2006. Westport believes that the city will continue to flourish because it is known for having an educated workforce, with expertise in technology services and biotechnology.
“We are excited about the prospects for residential real estate growth in India, and in Hyderabad in particular. The demographics show a clear need for new housing and the rising income of the population will support developments such as this one. We will continue to look for opportunities in India,” Greg Geiger, principal of Westport, said in a statement.
The Indian real estate market, just like the Indian economy itself, is garnering attention from outside investors.
In February 2007, the Vancouver-based Royal Indian Raj International Corp. launched a luxury residential resort property in India. The $600 million project, called the Royal Garden Villas & Resorts, is located outside of Bangalore and is being built on about 1,000 acres. The development is a gated residential community. The chairman and chief executive officer of Royal Indian Raj International Corp. is Manoj Benjamin.
In February, Benjamin told the IndUS Business Journal his company was selling about nine units of the Royal Garden Villas and Resorts per day. He said the reason the Indian real estate market has picked up is due to the government loosening restrictions for foreign direct investments in the country’s real estate market. This opened the door for the growing real estate boom.
Benjamin added that since his company is based in North America, they want to serve as a bridge for the increasing number of companies that are going to India and looking for real estate. Royal Indian Raj International is not the only one getting involved, either. According to Bloomberg, Caisse de Depot et Placement du Quebec is planning to enter the Indian real estate market for the first time and could spend up to $1.7 billion over five years. Caisse de Depot is Canada’s biggest pension fund manager.
Unlike the tough real estate market in the United States, Asia may see an increase in investment in this year’s second half, according to the world’s second largest commercial real estate broker, Jones Lang LaSalle Inc.
The Indian economy and its real estate market “have been on the high-growth curve since the early 2000s,” according to the report, “Strengthening India’s Capital Market – Rising Foreign Direct Investment in Real Estate” by Jones Lang LaSalle’s Debarpita Roy.
The report states that there has been $30 billion worth of real estate investments in Asian markets – $6 billion of which is directed towards India. Tier 1 cities – Delhi, Bangalore and Mumbai – are still the top destinations and are expected to continue to grow in the next two to three years, though Tier 2 cities – like Hyderabad – are expected to attract new investments. The majority of investments are also being put into residential and mixed-use projects due to improved returns at lower risks and also because they offer easy liquidity, according to the report.
Jones Lang LaSalle states in the report that private equity firms like Goldman Sachs, Morgan Stanley, JP Morgan and Blackstone Group are looking into investing in India’s real estate market.
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