Rebuilding value

Last year the Indian real estate market saw one of its worst plunges in recent history. The sector is now rebounding, with postponed and cancelled projects back on track

George W Russell reports

One sure sign of a property revival is the re-appearance of knots of small children playing in puddles and on sandhills amid big-city building sites. It usually means that India’s labour-intensive construction industry has returned to work. What might be bad for education – the migrant children have little access to schools and other resources – could be good for India’s bubbling property sector.

“The market, after last year’s meltdown and shakeups, has shown tremendous recovery in both commercial and residential space,” says Himanshu Chahar, a partner at LexCounsel in Delhi. “Real estate projects that had all of a sudden lost substantial net worth and value, creating severe liquidity problems, are back on track.”

The sector’s recovering health has prompted at least 10 large and medium-sized property companies to re-examine plans for public offerings totalling about US$4 billion in 2010-11. Delhi-based Emaar MGF Land hopes to raise Rs38.5 billion (US$870 million) in the third quarter of 2010, while Delhi’s Ambience Co, Mumbai-based Lodha Developers, Lucknow developer Sahara Prime City and Bangalore-based Nitesh Estates are also planning to tap capital markets.