Whatever, could a mall in Ahmedabad, or an office complex in Hyderabad, and say a residential township in Baroda have in common? Simple, the answer to all three is that

have all been built courtesy of funds put together by rich Non-Resident Indians.

Given the returns offered by Indian real estate, analysts after carefully studying the realty sector confirm investments through informal funds floated by dollar-rich NRIs are

very much on the rise. It is surmised by these same real estate analysts that around $600-million may have come in through such investments in the last calendar year alone. Investments through formal channels may easily have been many times more, though exact estimates are not available.

Akhil Hirani, Managing Partner of Majmudar and Co, a Mumbai law firm says: “We get around five or six such enquiries every week, mostly from NRIs who want to put together a fund to build a property, stay through the stipulated lock-in period and then sell and exit."

Most of the investment, which is usually $10-25-million comes from funds sourced from an extended NRI clan and friends, according to Hirani. Most of the investors, he says, are interested in projects in their native cities, where family or close friends are in a position to oversee their investments.

Several such investments have taken place in smaller cities with large NRI communities, such as, Jaipur, Hyderabad, Vijayawada, Ahmedabad, Baroda and Surat. And, most of the investments are routed through Mauritius, to leverage double tax treaties. Typical investments take place in projects with low costs, and which allow both developer and investor to gain, the former by easy access to capital, the latter from an attractive return on investment.

Over the past three years, investment in Indian real estate has grown rapidly, with annual average returns in smaller cities going up to 50%. A recent study by Jones Lang Lasalle, global real estate consultants, estimates that $ 8-billion of private equity could flow into the Indian real estate over the next 18 to 30-months. And, an Associated Chamber of Commerce study estimates, around 25-million NRIs in a 125-countries are investing in immovable property in India, showing a keen interest in residential properties, rather than commercial ones, according to the study.