New Delhi: "Foreign investors' growing appetite for the booming Indian property market will enable the sector to increase its share in total FDI inflow into the country by at least ten per cent in 2006-07," a study by industry body ASSOCHAM said.

The study Future of Real Estate Investment in India projects that in 2006-07 the total foreign direct investments into India would be about eight billion dollars, of which the share of the real estate sector is estimated at 26.5 per cent.

In 2005-06, the share of the realty sector in the total FDI of 5.46 billion dollar stood at 16 per cent.

Rising demand of office space from IT and ITE's sectors is attracting overseas investors to pump money into India, the study says. The overseas investments will also be finding larger space in Indian SEZ's and shopping malls.

The study forecasts the Indian real estate market to grow by more than three times to reach 60 billion dollars by 2010 from the present 16 billion dollars, of which the share of foreign investments would be in the range of 25-28 billion dollars.

The study attributed the massive flow of FDI's in India's property market to China's real estate market reaching its saturation level. Besides, foreign investors prefer to invest on freehold land, which is available more freely in India.

The sector has already evinced interest from a number of foreign investors, including Royal Indian Raj, Blackstone, Goldman Sachs and Emmar properties, who have announced their plans to collectively invest over six billion dollars.

Royal Indian Raj International plans to invest 2.9 billion dollars, followed by the Blackstone Group and Goldman Sachs with one billion dollars each and Emmar Properties with 800 million dollars.

PTI

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