AP wooing real estate investments: ASSOCHAM

Hyderabad, May 16 (INN): Andhra Pradesh (AP) ranked fifth with a share of over 10 per cent in the total outstanding investments worth over Rs 14 lakh crore attracted by the real estate sector across India as of March 2013, apex industry body ASSOCHAM said on Thursday.

'Besides, AP has also clocked over 13 per cent growth in the total outstanding investments attracted by the real estate sector during the course of past five financial years (FY) 2008-09 and 2012-13 as against the all-India growth rate of 25 per cent,' according to a real estate sector specific analysis carried out by The Associated Chambers of Commerce and Industry of India (ASSOCHAM).

'Although Andhra Pradesh has attracted outstanding investments worth over Rs 1.4 lakh crore as of March 2013, but the Deccan state has registered a significant 90 per cent decline vis-'-vis new investment commitments attracted by the realty sector between FY 2011-12 and FY 2012-13 across the state,' said DS Rawat, national secretary general of ASSOCHAM while releasing the chamber's analysis.

'AP has ranked ninth with just over two per cent in the total value of new investment commitments worth over Rs 42,000 crore made by the domestic and foreign private sources in the real estate sector across India during the last fiscal,' said Rawat.

'AP had attracted new investment commitments in the real estate sector worth over Rs 9,400 crore in FY 2011-12 while the state failed to improve its performance as the new investment commitments in real estate sector in FY 2012-13 declined to just about Rs 975 crore.'

The realty sector in India attracted new investment commitments worth over Rs 42,000 crore during the last fiscal which slipped from over Rs 92,600 crore a year ago, thereby registering a significant decline of about 55 per cent, highlighted the ASSOCHAM analysis.

While most of the states have seen a drop of over 50 per cent in attracting new investment commitments in the realty sector in FY 2012-13, only Gujarat (700 per cent), Kerala (550 per cent), Uttarakhand (400 per cent) and Rajasthan (175 per cent) are few significant states that have seen massive growth in attracting new investments in real estate.

'Gujarat also has the highest share of about 41 per cent in the new investment commitments attracted by the real estate sector across India during the last fiscal,' highlights the ASSOCHAM analysis.

'Apart from Gujarat, the states of Maharashtra (over 17 per cent), Karnataka (10 per cent), Tamil Nadu (eight per cent) and Uttar Pradesh (over six per cent) are amid top five states with maximum share in new investment commitments attracted by real estate sector across India.'

The state of Maharashtra accounts for maximum share of about 20 per cent in the total outstanding investments worth over Rs 14 lakh crore attracted by the real estate sector across India as of March 2013, according to the ASSOCHAM study.

'Realty sector accounts for over 11 per cent share in total outstanding investments worth over Rs 122 lakh crore attracted by different sectors from various public and private sources across India,' said Rawat.

Maharashtra, Gujarat, Haryana, Karnataka and Andhra Pradesh are the top five states with highest share for attracting maximum outstanding investments in the real estate segment across India. Besides, these five states account for over 70 per cent of the total outstanding investments attracted by realty sector across India.

'The real estate sector in India has been plagued with serious problems of late like falling sales, rising construction costs, dampened market sentiment overall, sluggish economic growth, high interest rates, high inflation and poor industrial production (IIP) due to which leading players in the sector had to sell of their land to reduce debt, private equity players have trimmed their exposure in realty sector and general slowdown in various industries has hit commercial real estate,' said Rawat.

'However, certain positive developments like parliament's approval of foreign direct investment (FDI) in multi-brand retail would help attract foreign investments and give a fillip to the retail industry and simultaneously boost the demand for commercial real estate in the country.