Dawnay Day to invest $1.5 bn in Indian realty.
Source Business Standard (India):
- Dawnay Day International, the $10 billion UK-based investment company, is planning to invest $1.5 billion in the booming Indian real estate sector in the next two years.
- Dawnay Day has entered into a joint venture with a Bangalore-based family to develop a mixed property development including office and retail on 16 acres with an investment of Rs 400 crore. Dawnay Day India Land, headed by MK Singh, will execute the project.
- G Naggar, chairman of Dawnay Day International, said, “Though realty prices are cooling down and interest rates are going up, Indian real estate space is very interesting. We want to actively develop properties by forming JVs with landowners, apart from outright purchase, consortium tendering/auctions. We will be part of India’s development and growth and will invest in property and infrastructure projects across India’s geography.”
- Unlike Europe where Dawnay Day is mostly into development of commercial space, the firm would focus on residential development in India, Naggar said.
- “We like to invest mostly in commercial development. But, we want to focus on the enormous opportunity in the residential development equally in Tier-II and Tier-III cities. Finding the right partner and the right property is our priority,” he said.
- Dawnay Day is even exploring possibilities in warehousing, as the group sees a lot of potential in the sector in wake of burgeoning organised sector in the country.
- On the Indian real estate sector, Naggar said, “With rising interest rates and inflation on one side and rapidly developing Indian economy on the other, realty prices should soon stabilise. This cooling off and drop in the stock prices of realty firms provides an excellent opportunity for us to invest in realty projects, including integrated townships.”
- The UK-based companies has three subsidiaries in India — financial services provider and advisory firm Dawnay Day AV India, Dawnay Day Hotels India and real estate development firm Dawnay Day India Land.
- Dawnay Day Hotels India has plans to invest $200 million to build 10-15 hotels in the next three years. It has acquired properties in four cities — Pune, Ahmedabad, Delhi and Jaipur — and are close to finalising deals to buy properties in three other cities.
Dawnay is surely trying to capitalise on the shortage of ~19.4 million housing units, including ~6.7 million units in urban India, hence it makes sense for them to invest in residential spaces in India than in commercial.
Seems like foreign investors in the Indian reality sector are mushrooming at the same pace as Web 2.0 companies, both wanting a bite of their respective spaces.
With so much money and so many players, in the reality sector, it would be interesting to see how the developers differentiate themselves from one another based on cost, amenities, payment facilities, brand name, transparency, quality, customer service et… One’s mistake will be other’s advantage. I am sure the firms will be working hard not to make a mistake and loose credibility and market share.