In any case, as international real estate investors determine their strategy for 2008, it seems that four key trends are emerging that will help shape the strategy for many fund managers.

One, there is an increasing amount of attention to execution risk and physical underwriting. In the flurry of deals that occurred in the trailing 12-18 months, the velocity for decision-making created an environment that encouraged cutting corners. Sometimes, timelines and costs were plugged into Excel models, and the numbers being generated were viewed as sacrosanct. Excel is a wonderful tool, but that is all it is-a tool. But now funds are taking greater care to analyse the execution risks of a proposed project with careful input from in-house civil engineers, architects, quantity surveyors and research professionals.

This is increasingly important as projects are being delayed due to a dearth of qualified project management companies to provide oversight in the development process.

Two, funds are looking to blend the risk profile of their investments by coupling execution and timing risk with price and valuation risk.

Funds may look at investing in a suburban township, in which case the basis on the land is low and therefore the pricing risk is mitigated. However, such a project is typically larger in terms of square footage and requirement of new infrastructure, and would require phasing and more diligent project management.

Such an investment might be coupled with a core investment in a city centre, where although there is greater price risk in terms of concentration of value (high floor space index or FSI cost; FSI defines the area of building that can be developed on a particular piece of land), the ability and time to build are greatly reduced.

Three, funds are increasingly looking to invest in mixeduse development projects, whether in townships or in integrated high-rise buildings in CBD (central business district) locations. Investors have found that there are synergistic benefits to having different asset types co-located. For example, proximity of retail and office can drive revenues in a hotel while also boosting residential pricing.

Finally, funds have begun to syndicate large transactions and partner, rather than compete. Much of this is driven by a pragmatic approach towards underwriting-the old adage of "two sets of eyes are better than one" has become a mantra as firms realize that the amount of due diligence needed in Indian development deals can require the efforts of multiple teams. Another significant benefit is that such sharing of deals allows collaborative fund managers to diversify risk among several transactions while also avoiding valuation escalations, which are sure to arise from competition. It helps that the real estate fund community is fairly tight-knit, with longstanding friendships among many members of various deal teams.