Parekh wants realty FDI threshold at 25 acres

Mumbai, Jan 25 | Updated: Jan 27 2005, 05:30am hrs
Housing Development Finance Corporation (HDFC) chairman Deepak Parekh has said that the Centre should review its policy on foreign direct investment (FDI) in real estate.

Mr Parekh has suggested that the threshold limit for FDI eligibility should be brought down to 25 acres from the proposed 100 acres. Which cities in the country will have 100 acres of available empty space to qualify for FDI he asked.

The qualifying area should be around 25 acres which can facilitate large overseas investment in the country, he said. Mr Parekh was of the view that though large commercial space which can qualify the FDI, is available in the small towns, it would not be economical to invest there. It wouldnt be possible to get returns to justify such an investment, Mr Parekh said.

Arguing in favour of FDI in real estate, Mr Parekh commented that the country needs FDI to ensure quality buildings. If we are talking about making Mumbai into a city like Shanghai, we need quality constructions, he observed.

Quality construction has an important role in pushing up economic growth, he said.

In cities like Delhi and Bangalore, prices have gone up. But it is mostly investors who are buying properties. Almost 90% of the new buyers are investors, he said.