Sep 05, 2013 | Comments 3
Wells Fargo, a US-based financial company, shuttered its real estate investment arm in India due to poor returns on investments. The company entered the Indian market just four years ago investing in several real estate projects in Delhi and Bangalore.
“India is falling out of favour due to its weakening macro environment. [The] majority of foreign funds that are operating here have not been able to fetch solid returns on their investments,” Ambar Maheshwari, managing director at Jones Lang LaSalle, told Indian daily The Economic Times. “Given a choice, they are doing all they can to consolidate their positions. But this is not isolated to any specific sector like real estate, and macro-economic fundamentals need to be corrected before we see any change in this.”
The move comes shortly after another multinational private investment firm, Starwood Group, closed its office in India, continuing a mass exodus that began during the global financial slowdown when global investors such as Lehman Brothers, Bank of America and Merrill Lynch exited the Indian real estate market.
Private equity investments in Indian real estate plummeted through H1 2013, experiencing a 46 percent year-on-year decline, according to statistics from international property consulting firm Cushman and Wakefield.