London The Favourite Destination For India's Ultra-Rich?

[Dhondy]

http://business.timesonline.co.uk/tol/business/markets/india/article2127730.ece London is place to be for India’s rich For a new breed of business people from Delhi and Bombay, the UK is home from home, Ashling O’Connor says in our series on the new Anglo-Indian links It used to be a standing joke that the Confederation of Indian Industry (CII) timed its annual business leaders’ forum in London to coincide with the Wimbledon tennis championships. The conference offered a happy escape from the Indian monsoon and an all-expenses paid opportunity for leading executives and their wives to catch up with friends, relatives and the English summer social season. Although the timing of this year’s event was no different, the tone of the gathering was anything but frivolous. Even the launch cocktail party at Benares, the Berkeley Square restaurant run by Atul Kochhar, the first Indian chef to be awarded a Michelin star, was serious business. Among the guests was Lakshmi Mittal, the London-based steel baron and the world’s wealthiest Indian, who swept in before a dinner with the former US President Bill Clinton to hear about the boom times in India directly from the industrialists leading the charge. Sunil Bharti Mittal, the self-made telecoms billionaire, could be seen catching up with Lynn Forester, Lady de Rothschild, with whom he has an Indian fresh-produce retail joint venture, while Uday Kotak, the founder of one of India’s largest brokerages, was deep in conversation with C. K. Birla, chairman of Hindustan Motors, India’s oldest carmaker. All around the restaurant, Indians gaining in global stature with each passing year were talking shop. More than ever before, that shop is in Britain. Only five years ago, an observer would have struggled to identify these executives. Today they are household names, the collective wealth in the room easily surpassed $40 billion (£19.5 billion) and London is where they prefer to meet. According to the CII organisers, they would struggle to put together quite such an impressive cast list in the US. “None of them want to go there,” one said. No more starkly are India’s rising fortunes highlighted than in the increasing prosperity of its richest citizens. Lifted by a hot stock market and a property boom, India is home to 36 dollar billionaires, more even than Japan, according to Forbes magazine. In a country where nearly half the 1.1 billion population scrapes by on a dollar a day, there are an estimated 83,000 millionaires. Many already have second homes in London; others are gearing up to invest in property after the Indian Government’s relaxation of currency outflow restrictions in March. India’s central bank raised the overseas investment limit from $50,000 to $100,000 per family member, which bankers say has given a big kick to capital outflows. By the end of the year, the limit will be $250,000, meaning that a family of four could invest the more meaningful sum of $1 million. The natural home for this money is Britain. Nipun Mehta, the chief executive of Unitis Tower Wealth Advisers in Bombay, whose clients have $1 million-plus to invest, said: “A lot of people are putting [money] in a fixed deposit account in the UK and gradually it will go into equities and property. “In the last few months, we have had three UK banks – RBS, Man Financial and Barclays – chasing us for raising funds through three different asset classes: private equity, hedge funds and geographical funds. They had a lot of takers.” Indians would get a far better rate of capital appreciation by investing domestically in property – prices in Bombay and Delhi have doubled in the past two years – but Indian interest rates are twice those in the UK. For most, it is about “lifestyle investing” and London is the place to be. “London has always been at the back of the minds of Indians,” Anita Nandi, the head of the City of London’s India office in Bombay, said. “It’s not just the billionaires, it is small-time investors. That trend will only escalate. The momentum has started and there is no stopping it.” Last year 60 per cent of the £5 million-plus properties sold in Central London were snapped up by foreigners. Besides big-spending Russians and Americans, Indians were among the buyers of prime property in Belgravia, Knightsbridge, Hampstead, Regent’s Park and St John’s Wood (for its proximity to Lord’s cricket ground). In April Savills’ first roadshow in India touted luxury properties, including One Hyde Park, which, at nearly £100 million for a 20,000 sq ft penthouse, boasts the world’s most expensive flats. The UK estate agent was surprised by the eager response from Indians. “They want as prime as it gets,” Sheetell Chantel Halai, the head of Savills’ newly created India desk, said. “It is not just the billionaire boys’ club, but parents wanting to school their children, businessmen with work commitments in the UK or people looking for a good investment. London is becoming a status symbol. One of my clients looking around the £3 million mark was a famous Bollywood actress who wanted an apartment so she could shop on the King’s Road.” With many Indian multinational companies opening subsidiaries in London, their well-heeled executives are going house-hunting in a big way. Most have a budget of £500,000 to £1 million, according to Jaideep Singh, head of Knight Frank’s decade-old India desk, but a few are searching for properties worth anywhere between £5 million and £20 million. “Indians’ first investment abroad is always Britain,” he said. “They know about appreciation in the market. They already have properties in India and they think, why put all your eggs in one basket? These people are car manufacturers, IT entrepreneurs and Bollywood actors. They like the nightlife, they want to do their shopping and go to Wimbledon. The best place for them to meet is London.”

[Ram]

" In a country where nearly half the 1.1 billion population scrapes by on a dollar a day" -- The default line in every article about India. Without doubt, London is becoming the favorite hot-spot of many millionaires from all over the world , let alone India. A bit surprised they didnt mention about Kensington palace , owned by the Mittals. I think the british govt too is very keen on these big business honchos setting shop in London , giving them a lots of tax revenue. Wonder how it will affect the common Londoner though , what with the spiralling real-estate prices. For locals who already owned land in those areas , it is boom time. So i guess it works both ways. Besides , the pound seems to be the safer currency to invest in , with better returns compared to the dollar. The rupee has appreciated a staggering 13 % against the dollar in the last one year alone. If this trend continues , people will find it makes better sense to own assets in places other than the US

[Ram]

On the same topic , i feel that someone looking to invest money in real - estate in the US ,would be well advised to look at India as an alternate location. At the present rate of boom in real estate , i claim the "indian" investment will yield better returns over the medium to long term , than the "american" investment.

[Lurker]

http://business.timesonline.co.uk/tol/business/markets/india/article2127730.ece London is place to be for India’s rich For a new breed of business people from Delhi and Bombay, the UK is home from home, Ashling O’Connor says in our series on the new Anglo-Indian links

Not in this years monsoon no way :confused_smile:

[Holysmoke]

OK, now i know where to go and beg in case i never ever find a job :tounge_smile:

[Zooter]

India's Elites aren't going to London cause "it's cool." They're doing it because our business elite are joining in the new world order globilization rampage. The next wave of change in Indian politics will be the not-so-slow takeover of the Gov't by these Western owned Indian businessmen. Our top politicos will be mostly globilized businessmen just as they are in the U.S. and most western countries. They will (unbeknownst to them) become the agenturs of the Rothschilds and other European banking elites in India. This is how the independence movement dies--in an invisible way--even to the very businessmen who are being themselves bought. I hate these Goddam secret societies ... they're an infestation; all parasitical. Just as the old "Maha"rajas thought that ingratiating themselves to the British high caste aristocrats was a sign of positive change, so do the modern businesspersons of India. Free trade is good. What's going on right now is MANGAED TRADE BY THE ELITE (aka globilization).

[Dhondy]

Yes Sriram, the common man in London is struggling. Believe it or not, the price of an average house in London is now around $700K. The average salary in the UK is around $45K. You can imagine the plight of the common man. Completely priced out, and having to commute from the suburbs. Even there, properties cost the earth.

[King Tendulkar]

Yes Sriram, the common man in London is struggling. .

Er bit OTT there. Struggling not sure about that.

[Ram]

We have had a similar experience like this in Chennai in the last few years. There is road leading from South Madras to the Mahabalipuram beach resort called Old Mahabalipuram road. It was a stretch of 40 kms of 100 feet road. Till a few years ago , it was all but barren land , hardly commuted to by anyone. In the mid-90's a lot cash-rich politicians who wanted to invest their money, started constructing engineering colleges here, mainly because huge areas of land were needed ( typically 50 acres) for building these colleges and there was no way it could be done in the city. This led to some population movement in this area. Circa early 2000 , was the turning point. Taking the lead of the engineering colleges , the software companies too started building their centers here. Not just one or two , but ALL of them. And many people started working there , they found it difficult to commute the long kms needed to get these campuses from the heart of the city. So apartments began coming up , slowly. This was the beginning of the avalanche effect of a dramatic change in the economic profile of the area. The who's who of software in India like Infosys , Satyam , TCS , Wipro , Cognizant , Polaris and many more have their development centers in this singe road , so much so that it is now called IT corridor. The college which i studied was on the other end of this road. So I had to travel something like 20 kms in that road itself to get there. It was quite mind boggling so all these tech companies and colleges campuses , one after the other. It is even safe to say , in a stretch of 25 kms , you would have almost 150,000 tech professionals and graduates being based out of there. From being one sleepy , neglected part of the city till a decade ago , Old mahabalipuram road is now the HOTTEST real estate property in chennai. And I have seen that transformation happen , right in front of my eyes. People who bought land for 5 lakhs ten years ago in that area , are now selling the same piece of land for 40-50 lakhs. If ever there was a good return-on-investment , i guess it was this one.

[Rajiv]

Reminds of me that childhood line Tere baap ka "L-u-n-d u-n" ka coat bahut accha hain