INVESTORS TARGET PROPERTY MARKET IN INDIA

By Khozem Merchant, The Financial Times, April 14, 2005

US developer Tishman Speyer Properties and ICICI Ventures, a private
equity fund in Mumbai, expect to announce within three months joint
building projects with an investment of Dollars 450m - illustrating the
rise of property as one of the most appealing investment areas in India's
fast-growing economy.

The partnership is negotiating the purchase of land from state governments
in Mumbai, Calcutta and Bangalore, where it hopes to build townships with
7,000-10,000 houses and 1m-1.5m sq ft of shops and offices over five years.

New York-based TSP is the first big US developer to take advantage of
recently relaxed foreign direct investment rules, which allow 100 per cent
overseas investments in residential projects on a minimum plot size of 25
acres and commercial development of 50,000 sq m.

Another US company, Houston-based Hines, is exploring a partnership with
Indian businessman Nikhil Gandhi to develop special economic zones.

Observers say the participation of big foreign construction companies in
India's property market will increase if the country's economy continues
its current growth of at least 6.9 per cent and home-ownership becomes
more popular.

"I've not seen this scale of serious inquiry and it has been driven by low
interest rates, prosperity, modern attitudes to home ownership and now
easier FDI," said Anuj Puri, managing director of Chesterton Meghraj, a
Mumbai property consultancy.

This month, HDFC, India's biggest mortgage-lender, raised Rs10bn (Dollars
230m) with the launch of a property fund with State Bank of India that
will develop housing and office complexes in partnership with local
construction companies in cities such as Hyderabad.

Deepak Parekh, chairman of HDFC, said there had been "lots of active
interest from private equity funds". But only foreign involvement from
developers such as TSP and Hines would "bring in the skills to build and
manage large-scale construction projects".

This week, ICICI Ventures also announced the launch of a Dollars 300m
property fund. To be managed by ICICI Ventures, the fund will invest in construction projects with TSP, whose outlay in the joint venture is
expected to total about Dollars 300m over the next five to seven years.

Executives say the arrival of institutional funding and large developers
is astep towards the emergence of sophisticated investment tools based on
assets such as rental income, which would deepen capital markets.