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Non-Resident Indians (NRIs) Home In On India, Account For 10% Of SalesBy Riti, Section Gurgaon Real Estate Property
Home sales in India might have turned sluggish but sales to non-resident Indians (NRIs) are booming. According to Jones Lang LaSalle Meghraj (JLLM), residential sales to NRIs have tripled over the last six months, from 3% to about 10% of the total sales.
"What would happen when one loses his job in the US? The downturn is scaring many NRIs who fear job cuts," says JLLM's Raminder Grover. "There is a renewed interest in selling abroad," says Lodha Group senior VP R Kartik. Many NRIs have been thinking of coming back to India and "many of them are making safety investments," explains Mr Kartik. Over the last few months, Lodha has seen a 25% increase in its sales to NRIs. Sobha Developers has seen the share of NRI sales go up from 5% to 10% of its sales. "In the last six months, we have been selling about 25,000 sq.ft. a month to NRIs," says Sobha Developers MD Jagdish C Sharma. Selling to NRIs though is a very different proposition. "You need a different strategy for NRIs. To service the requirements of NRIs, you need to have your own representation in the target market," says Mr Kartik. Omaxe has had roadshows in the US, UK, Canada and Dubai to promote its residential projects and have representative offices, too. Omaxe VP marketing Vineet Nanda says, "NRIs made only about 3% of their total luxury apartment sales but today constitute about 10%. A good chunk of their NRI sales comes from Middle East."
For some like Tata Housing, it is a much larger business. "We have not done any formal marketing of our properties in the international market but already 10-15% of our sales are to NRIs. When we start our promotions, we expect this figure to go up to 25-30% of our total sales," says Tata Housing CEO Brotin Banerjee. They have received a tremendous response from the US, UK and Canada for their projects in Bangalore, Gurgaon, Chandigarh and Kolkata.
"Many NRIs would like to have a place in India since the country is expected to tide over this downturn and would be a better place to work in the future," says Mr Banerjee. Propertymixer.com CEO Minal Arora says a lot of NRIs, who are considering coming back, are securing sales in India. But not everybody thinks so. For Jayesh Desai, head, real estate at Ernst & Young, these are purely investment sales. Well over 50% of NRI sales will be for investment. "With a downturn in the west, India is still a better market for investment. But, if they don't see returns, this segment will start going down too," warns Desai. According to him, the reality is that the market in India is very tight and Indian speculative investors are out. "The share of the NRI market might be higher because of this," he says. Omaxe ED Vipin Aggarwal, too, subscribes to the same logic. "Most NRIs are buying in India only for investing and not for end-use," he says. For developers though, it is a good way to catch up on lost sales in the Indian market. With a big push, a number of developers from across the country are embarking on roadshows in markets where there is a large NRI presence. The favourites really are the Middle East, UK and the US markets. Source:Economic Times 8thJuly2008.
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