Nearly 50 percent of the purchases made in Sobha Developer’s Kerala real estate projects have been made by non-resident Indians (NRIs) living in the Gulf, demonstrating the increasing influence the GCC has on segments of India’s real estate sector.
Investors in Sobha City, a 55-acre project in Thrissur, Kerala, include jeweller Joy Alukkas and Lulu Group’s Yusuff Ali, amongst others, said Ramakrishnan P, deputy managing director, Sobha Developers.
“In India overall about 20 percent [of investors] are NRIs. There is a large percentage from the Middle East too. There are a lot of Malayalam’s outside Indian, especially in the Middle East. Roughly 48 percent of my sales are from people in the Middle East,” he said.
The figure is nearly double the average for Sobha’s other projects, added Ramakrishnan P.
“A large number of [people working in the Middle East] are from Kerala. Besides the Middle East we also have customers from the US, Canada and Europe so about 18-20 percent of our investors are from outside [India].”
The GCC is home to an estimated 4m Indians, with the UAE accounting for nearly one fourth of all NRI living in the oil-rich region, according to Indian government figures. While a large portion of the Indian population comprises migrant workers, the Gulf’s is also home to a growing number of successful businessmen.
Ten Indian billionaires featured in this year’s Arabian Business Gulf’s 50 Richest Indians list while the top 50 shared an estimated net worth of US$40.2bn.
Sobha Developers, founded by the Indian businessman PNC Menon, said the majority of buyers from the Gulf are end users, not speculators. “Not even one guy in Thrissur has purchased for investment. They may be renting it out if they are not in town but at the end of the day they want to come and stay so it’s their home,” said Ramakrishnan P.
Property prices across India declined 16 percent in the last quarter of 2012 compared to the third quarter amid concerns of an economic slowdown, according to property consultants CBRE.