Sourav Goswami, Managing Director
Walton Street Capital India
After the excesses of investing at dizzying valuations throughout 2007, many of us in the Indian real estate private equity arena are now taking stock of where we are and where we are going in the year ahead in 2008.
The year 2007 was a banner year, with estimates of more than US$5 billion (Rs20,050 crore) of foreign funds flowing into projects sponsored by rapidly growing developers.
Another theme for the year was initial public offerings. With the DLF Ltd listing energising the market, several developers proceeded to go public in India, creating a robust marketplace for retail investors to participate in the growth story while also offering ability for promoters and investors to project forward into yet another exit strategy. This is expected to be broadened in 2008 with the advent of the Reit (real estate investment trust) structure, which market participants hope will create more tax or structurally efficient structures for yield-oriented investors to participate in the real estate market. In most markets, the Reits offer pass-through vehicles which allow rental incomes to be distributed as dividends and taxed in the hands of the individual investors rather than at the corporate level. The final structure of Reits in India, including ownership structure, portfolio weightage and tax treatment, is still being debated.
