Anyone that read Thomas Friedman’s “The World is Flat” has heard the case for India being the next mega market. Banks have noticed this too of course, by beginning to invest in the developing region, and trying to attract new wealthy clients. Some bankers in particular have interest and growth prospects in the region, as evidenced by the recent actions of Ravi Hansoty, former headr of the Asia-Pacific region at Citi Property Investors, a division of Citigroup (NYSE: C). Hansoty plans to raise as much as $350 million by the end of next year for an India property fund.
The fund aims to buy land to build apartments and hotels in India as early as June, said Hansoty, who left Citigroup Inc.’s real estate asset management unit in November. Hansoty said he will set up his company in Mumbai and may relocate from Hong Kong after he stops accepting new money from investors. Hansoty aims to take advantage of increasing demand for housing in one of Asia’s fastest growing economies.
These aims are not limited to a single banker though, in fact, eight funds are raising $1.6 billion to invest in India, London-based research firm Preqin Ltd. said in a November report, while an estimated 38 million homes are needed in the nation of 1.2 billion people by 2030, according to San Francisco-based McKinsey Global Institute.
The fund will seek to develop hotels and buy existing ones amid rising demand for business and leisure travel in the country, Hansoty said. Fairmont Raffles Holdings International plans to add six hotels under its Swissotel brand in India in the next five years to tap the growing demand for business travel in the country, Aiden McAuley, vice president of Asia-Pacific region for Swissotel Hotels & Resorts, said Nov. 22. As occupancy rates in India are rising to record levels thanks to domestic demand, revenue per room has also nearly doubled, creating a highly attractive investment opportunity for hoteliers and thus, financing for them.
Hansoty encapsulated his strategy in saying “When we look at the GDP growth for India, there are probably very few countries in the world which are growing at a rate of about 7 percent in an economy that is sizeable enough to have an impact. Here is a market where you have everything sitting at the right place if you are looking for long-term growth.”
