Foreign Investors Snapping Up Distressed Property Deals
Apr. 17 – Foreign private equity investors are looking to snap up good deals in the Indian real estate market by buying heavily discounted properties affected by the slowing economy.
Investors from the EU and Middle East are expected to invest US$400-US$500 million in distressed land deals, reports The Economic Times. Namely Spain’s Nova Capital; Germany’s SachsenFonds, Qatar-based Barwa International and Al Aqueela, UK’s Matrix Partners and Aberdean International.
“In the next six months, we will see lot of distressed real estate deals in India. Small and medium developers with turnovers in the range of Rs 50 crore-Rs 250 crore will be forced to go for distress sales to sustain themselves in the economic downturn,” said YEN Management Consultants managing director, Sunil Shirole, told The Economic Times.
Due to plunging demand, developers have been stuck with an average 5 or more projects. Developers plan to sell about 40 percent of their stock with an added discount of 25 to 40 percent of the original price.
Shirole added: “We could see 50 percent of total real estate market coming under distressed deals. As foreign PE players have the liquidity and staying power, after buying such properties, they can wait 4-5 years or till such time the property market rebounds to sell them at higher price.”
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