Indian property hotspots 'close to best infrastructure'

India's booming economy has seen the property market growing fast along with so many other things. With the country on the up it may appear that there is no limit to the prospects for growth.Certainly there are those who think so. Last week Hena Kishore, a property consultant for Sternon, said India was not only "emerging very strongly as a property market", but a completely risk-free market where the legal basis of buying property gave the buyer full protection and the strength of the economy was attracting buyers en masse. Hers was a thoroughly upbeat assessment.But which are the property hotspots? Ms Kishore said Mumbai and Goa were particularly popular because of their appeal to westerners, especially as holiday destinations. That, of course, is good news for the buy-to-let industry. But for more evidence of where the best prospects are for property investors, it is perhaps best to study where the money is going. According to a report today by Reuters, reproduced in Pakistan's Daily Times, the bulk of the investment is heading where the best roads and airports are. In the case of tourist destinations, which by their very nature make the establishment and maintenance of a good international airport a priority, this is perhaps a case of stating the obvious. However, the article goes on to suggest that problems remain with the development of infrastructure in certain areas due to what it calls "India's legendary red tape and ingrained political mistrust of privatisation", citing the comments of Sameer Nayar, the head of real estate for Credit Suisse in Asia, who noted delays in constructing a highway between Delhi and its airport. What Mr Nayar argues is that developers are gravitating to the locations where the infrastructure is best established, which the article's author suggests may create areas of property oversupply. Yet in the same article he also notes that in some cases the investors themselves are investing in infrastructure, such as better sewerage and more reliable electricity supplies. The investment intentions of different companies may, however, suggest that any pessimism is misplaced. Reuters in Hong Kong reported last week that Citigroup's property Investment arm was looking to plough $400 million (£200 million) into property development in India, with the city of Pune the target of a $125 million housing project, while the same news agency's Mumbai office reported yesterday that Kotak Realty Funds was raising $350 million for investment in various projects and partnerships. If the development of India is haphazard, it may be worth noting the comments on the country by the Foreign and Commonwealth Office, stating that: "Economic reforms, initiated in 1991, have placed India firmly on the path of sustained economic growth." It adds that these acts of liberalisation followed decades of the economy being closed. That being the case, it may not be unreasonable to think that the "ingrained political mistrust of privatisation" could in fact be a vestige of old attitudes, ones which recent governments are increasingly moving away from. Besides this, however, it is also maybe worth considering that in a country so large, so socially diverse and changing so rapidly, there are bound to be some problems along the way and some respects in which parts of the country develop faster than others. This may well lead to a situation where those looking to invest in property, including in the buy-to-let market, have to carefully cherry-pick their locations, but it may also smooth out in time to create the required balance and stability in the long run.