The building surge is modest compared with China, where 25 million sq. ft. of commercial and 200 million sq. ft. of residential space will be built this year in Beijing alone. But experts think Indian real estate has as much potential as China - especially if the government removes a tangle of restrictive regulation. The investment hot Indian real estate spots now are the tech-driven growth centers of Bangalore, Mumbai, Hyderabad, Chennai and Gurgaon. The real estate boom in Indian real estate has also hit second-tier cities such as Pune in the west, Jaipur and Chandigarh in the north, and Kolkata in the east.
Even those in the business are surprised at the rapid runup Indian real estate in prices - and worry about a correction. "It's madness, especially with all the unplanned development," says K.G. Krishnamurthy, chief executive of the HDFC Property Fund, one of seven new private equity funds focused on real estate that have launched in India in 2005. Nearly $1 billion has poured into the funds so far this year.
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