Indian realty firms redraw strategy in SL
By P K Balachandran | ENS -
COLOMBO
10th December 2012 11:35 AM
Among
the Indian companies to launch projects in the capital city had been L and T,
Accor Developers, Eco Homes, Shreyas Developers, Suchir India and Krrish.
However,
many of them failed to take off. They have had to wind up their businesses and
quit, leaving flat buyers in the lurch. This trend had caused concern among
India’s policy makers and those promoting Indian investment in Sri Lanka.
But
attempts were now being made by a section of the investors to diagnose the
problem and take corrective steps. A source in the realty sector told Express
that the basic mistake that the Indian investors made was that they expected the
Indian model to work in Sri Lanka and were shocked to find that it did
not.
“In
India, the promoter first seeks bookings from buyers and finances the venture
with the advances made. But this is not the system in Sri Lanka. Here, flats are
sold after they are almost built fully. Therefore, in Sri Lanka, if an Indian
developer had expected 100 bookings, he might have got only 10, ” said a source
in Platinum 1, an ambitious Indian condominium project coming up in a prime area
in Colombo, which was working on the basis of the Sri Lankan model.
“We
at the Platinum Realty Investment Pvt Ltd decided to complete the work up to the
super structure level before announcing the launch of the project. Today, the
customer can walk-in and view his chosen space prior to purchase. This provides
the potential investor with the peace of mind that comes with knowing that his
investment is secure. Platinum l is not just an ambitious plan on paper,” the
source said.
The
company, which was a consortium of Paharpur Cooling Towers Group of India and
Pragnya Fund, a Mauritius-based Private Equity Fund, had already spent USD 20
million out of the USD 35 million earmarked for the 70-apartment project.
