It still may be a fragmented industry with high transaction costs and an absence of transparency, but it is whetting the appetites of domestic and overseas investors. In India, changing government policies and a focus on infrastructure are driving up the demand for housing developments, malls and offices.

"For investors seeking the high returns that are no longer possible in the mature European and North American real estate markets, India and China are hot," said Prakash Gurbaxani, the chief executive of TSI Ventures in Bangalore, a joint venture of Tishman Speyer Properties of New York and ICICI Bank, based in Mumbai.

"Every foreign investor group, including pension funds, high-net-worth individuals and private equity funds, are all looking at this sector," said Gurbaxani, whose company has planned to invest more than $1 billion in the industry in the next few years.

In the past, investors were wary of the opaque business practices in Indian real estate. The land laws were archaic, mortgage financing was expensive and the quality of the developments was poor.

But these days, India's $12 billion real estate market is expanding at a 30 percent annual rate. Analysts at Merrill Lynch predict that the real estate market will grow to $90 billion in 10 years.

Foreign and domestic investors are eagerly scouring this market, but only recently has real estate begun attracting meaningful amounts of capital, said Rajesh Khanna, managing director in India of the private equity firm Warburg Pincus. In the past year, Warburg Pincus has dedicated a third of its resources in India toward creating and evaluating real estate investment opportunities.

Next month, the real estate developer DLF Universal will have a public offering that is expected to raise more than $3 billion in what is billed as India's biggest share sale. It tops earlier public offerings such as the $2.3 billion share sale of the government's Oil and Natural Gas Corp. two years ago.

Kushal Pal Singh, the chairman of DLF and one of India's richest men, is credited with turning a sleepy New Delhi suburb into a bustling zone of fancy malls and offices. DLF has projects in 18 cities but plans to expand to 36.

Last year India's government eased restrictions on foreign ownership of real estate, construction and housing companies. Foreign developers can have wholly owned subsidiaries in India if they invest $10 million. Foreign companies can build commercial and residential buildings if the projects exceed 50,000 square meters, or about 538,000 square feet.

Last month, the California Public Employees Retirement System invested $100 million in a real estate fund floated by IL&FS Investment Managers of India. In March, Morgan Stanley's real estate investment arm said it would pay $68 million for a minority stake in an Indian property firm, Mantri Developers.

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