Many Japanese investors and developers are looking for investments in the India’s real estate sector, as they look to tap opportunities in the Asia’s largest economy. Some of the Japanese funding tycoons and companies like Mitsui Fudson, Mitsubushi Corporation, Sumitomo Corporation and Genkai Capital are planning to invest or increase their investments in India’s landholdings.
Japan is the third largest investor in India and an entity that looks to invest in long-term projects and the commercial real estate space is conducive as per Japanese experts. RMZ Corp. has recently collaborated with Japanese leading global real estate developer, Mitsui Fudosan to initiate commercial project worth around a $1 billion in India.
Government’s Comprehensive Economic Partnership Agreement (CEPA) has backed the strong relations between the two nations. The Bilateral ties between India and Japan are expected to become imperishable targeting a $5trillion economy in the next five year.
“Japanese money is a long term capital of 8-12 years. They have the risk appetite and are mostly looking at equity transaction across assets classed in real estate,” Shobhit Agarwal, MD & CEO of ANAROCK Capital.
Initial Japanese investment in the Indian real estate, Mitsubishi Corporation, Japan (“Mitsubishi”), has invested around Rs 180 cr in a large residential property project developed by Shriram Properties in Chennai in 2018.
“The Japanese investors are looking at IRR of around of 18% on their investment. We will see more such investments coming in due to transparency in the sector,” M Murali, MD Shriram Properties said.
According to Anarock research, in 10 years (2005-2014), foreign PE investments in Indian real estate were $ 9 bn but the last 5 years alone saw 84% surge.
Japanese funds play a major role in providing long-term solutions to Indian developers and 2020 can be seen as an action-packed year for Indian real estate funding.