Hines, Temasek plan to invest in realty sector

The US-based Hines and the Singapore-based Temasek are looking at investing in the real estate sector with the government opening the doors to foreign direct investment.

A host of a mid and medium-sized companies in Singapore, Malaysia and the Middle East are also planning to invest in the real estate market. Sources estimate that foreign direct investment in the sector will reach $1 billion in a year.

In a reply to a Business Standard questionaire, Temasek Holdings's spokesperson said, "We are open to opportunities but they will have to make commercial sense to us." A Hines spokesperson said, "It is too soon for us to discuss information relative to our interest in India. Please check back in a month or so."

Temasek has been aggressively investing in the Indian equity market for the past one and a half years. It has picked up sizeable stakes in companies such as ICICI Bank, Matrix Laboratories, Apollo Hospitals Enterprise, Satnam Overseas and Gateway Distriparks.

Hines is one of the largest privately held real estate development companies in the world. It has over 80 million square feet of real estate under management with a global footprint. It has offices in the US, the UK, France, Spain, Mexico, Poland, Russia, Germany, Brazil, Italy, Argentina, China and Canada.

Niranjan Hiranandani, managing director of the Mumbai-based Hiranandani Constructions, said foreign investments would easily reach $1 billion mark in a year.

"Initial signs of the huge investments are already there," he said pointing to the announcement of the Dubai-based Emar group and Hanna Construction to enter India through joint ventures with local partners.

Balaji Rao, managing director of TCG Urban Infrastructure Holdings, said big players, for example Hines and Temasek, are likely to invest in the range of $100 to $200 million.

"It does not make sense for big players to invest a small sum in a place far away from their headquarters. Mid-size players are expected to put in $50 million each," he added.

According to Rao, the size of total foreign investment would be clear in another six months by when a handful of big announcements would take place.

Meanwhile, some Indian players are spreading their wings overseas. Hiranandani Constructions is setting up in Dubai a 90-storied building, which will be the world's fifth tallest residential complex. Hiranandani said his company has "also looked at Australia and Singapore."