Sovereign wealth fund eyes opportunities in India’s real estate market
Qatar Investment Authority, the sovereign wealth fund of the Gulf state, is in talks to invest $200 million into residential property in India.
According to a Reuters report, the fund is holding conversations with Kotak Realty Fund, run by Kotak Mahindra Bank, which would manage investments on its behalf.
A source close to the deal, who declined to be named because the deal was not finalised, said that Kotak would also make a small investment and that it planned to focus on residential property developments in major cities across India, for QIA.
Kotak has declined to comment, the report said, while QIA has not responded to emails or telephone calls.
Sovereign wealth funds and other long term investors are eyeing opportunities in India’s real estate sector, betting on property prices bottoming out after slumping this year on the back of the country’s slowest economic growth in a decade.
House sales in major Indian cities, including Mumbai and Delhi, fell by 22% in the quarter ended September 30. House prices grew by 9% over the same period, compared with double digit increases in the year ago quarter, data released by property firm, Liases Foras.
Vikram Gandhi, founder of Delhi-based VSG Capital Advisers, which has been retained by Canada Pension Plan Investment Board (CPPIB) to seek investment opportunities in the country, said the timing to invest in Indian property was ideal.
“If you have a long-term perspective and you believe that the need for capital in a country is quite high, which it is, and the supply is limited right now because people are not investing, then this is the best time to invest,” he said.
In November, CPPIB said it would invest $200 million dollars to buy leased, income-producing office buildings in a joint venture with Indian construction company, Shapoorji Pallonji Group, which will invest $50 million.
QIA’s investment comes after the Abu Dhabi Investment Authority in July also appointed Kotak to invest $200 million in Indian real estate on its behalf, sources told Reuters at the time.