The Leader - November/December 2007 - (Page 16)

IN vestIN G IN IN DIa : re W arDs aW aI t I Nv e s to rs W I th a lo NG -te rm v I e W FI G. 4 a samplING of receNt real estate moves to IND Ia compaNy type of operatIoN cIty those with patience and tenacity. The question for foreign investors is: How much is one actually willing to bear? That said, once one is up the learning curve (in terms of process and contacts) with one or two investments, further investments will be less “painful.” leveraGe Is trIcky bmw daimler chrysler dell dow corning general motors honda hyundai microsoft suzuki manufacturing manufacturing manufacturing manufacturing r&d manufacturing manufacturing r&d manufacturing chengalpattu pune sriperumbudur mumbai bangalore rajasthan chennai bangalore new delhi Most foreign investors find the cost of debt in India to be high. Interest rates are often 9-11 percent, and amortization periods range from five to 10 years, creating a scenario where short-term cash flows are negative. The positive side is that this debt environment has made it difficult to over leverage, thereby making a “bubble” scenario (with many asset holders forced to sell due to loan maturity or interest coverage violations) less likely. there are some very GooD INvestmeNt opportuNItIes sition of income-producing assets outside of certain sectors, such as IT and hospitality, remains limited) � In addition, the judicial system in India is appreciably different from those of the U.S. and Europe. While India is a common law country, it can take years for claims to be processed. In addition, corruption is prevalent, though after long and tedious processes, the rule of law will prevail for FI G. 5 INDIa INflatIoN INDex 140 120 100 80 60 40 20 0 2000 2001 2002 2003 2004 2005 2006 � inflation % change in inflation As FDI regulations continue to evolve, the result has been the entry of a broad range of foreign real estate investors. Key opportunities exist in large scale residential development, hospitality, IT parks and infrastructure. Indian real estate presents an attractive long term investment proposition. In a land of 1.1 billion people (nearly four times the size of the U.S. population), and an economy growing at 8-10 percent per annum, but with 25 percent of the land mass of the U.S., good land is an important asset, and one which will appreciate significantly in the long run. Indian real estate remains attractive due to the country’s long-term economic story. Population growth and purchasing power growth are fueling both residential and retail demand, both of which are further fueled by the increased use of 2 0 0 7 the le aDe r 16 November / December

Table of Contents Feed for the Digital Edition of The Leader - November/December 2007

The Leader - November/December 2007 Leadership Contents Message from the CEO Real Estate in the News Investing in India 110 to One Smaller Workspaces, Better Workspaces Innovating the Workplace Through Design Sustainability and Energy Efficiency Getting It Right Using Location Intelligence to Reinvent Franchises Philips International’s Ron Blanken CB Richard Ellis’ Karen Ellzey The State of Louisiana’s Mike Olivier Industry Tracker Economic Developer Directory Discovery Forum Findings Career Development Emerging Leader Economic Development in the News A Look Ahead Executive Development Spotlight

The Leader - November/December 2007

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