International Real Estate Developer Kardan N.V. to Invest $1.2 Billion in Chinese and Indian Property Markets
Kardan N.V., a Dutch-Israeli real estate and finance investment company expands into China and India to profit from their property market, according to a Bloomberg report.
The company is planning to invest up to $1.2 billion (800 million Euros) in real estate in China and India.
“We see enormous demands in these markets. Go to China, go to India, and see what their needs are,” says Alain Ickovics, chairman of the management board.
China and India emerging as attractive real estate markets
This investment is an indication of where the big profits in real estate markets are going to be made. 2007 was a good year for real estate investments in both China and India. And this growth looks to continue in the future.
The World Bank has predicted that in 2008, China will grow at 9.6% while India’s growth will be around 8.4%. Even though these numbers were revised downwards from earlier predictions, the figures are still very impressive indeed.
The rapid expansion in these two economies has sparked a demand for new homes, offices, and shops in both China and India. And when you compare the return on investment from more saturated markets in Europe and US, you see why ‘CHINDIA,’ (as these two countries are collectively denominated), has become the prime target of many of the big investors, including Kardan N.V.
Developing retail and residential projects in Tier II cities in China
Kardan is targeting real estate projects in Tier-II Chinese cities with a population of three to fifteen million. Ickovics said in the Bloomberg report that around 350 to 400 million Chinese are expected to move from rural areas to cities in the next decade in search of jobs. This will create an enormous demand for housing, with experts predicting that housing prices will continue to soar in China’s major cities.
Kardan N.V. targets Mumbai, Delhi, and Pune in India
Within India, Kardan is planning to develop projects in the cities of Mumbai, New Delhi, and Pune. For investors, New Delhi and Mumbai have already established themselves as lucrative real estate markets. And Pune is quickly emerging as the next big thing in the Indian real estate market.
This is something reiterated by Ickovics, “Mumbai is the largest Indian financial center, Delhi is the capital and Pune offers strong potential for growth because of its location- not far from Mumbai - and its large, educated labor pool.”
The company is looking at long-term profits in real estate
Kardan N.V. has set aside 200 million Euros for equity investments in Asia, and the total investment, including financing, could be up to 4 times this figure. Currently, the company has six real-estate development projects in China and one in India.
Although Kardan is looking at China and India at the moment, there is also a possibility it could expand into other Asian countries at a later stage.
“We are brick builders,” Ickovics said. “We are creating value step by step. We don’t expect to make a billion tomorrow. For us, five or 10 years down the road is fine.”
They seem to be in it for the long haul - something that is sure to inspire the confidence of other investors and attract even more money to the area.
