As projects get delayed and investors tread cautiously with new developments, developers are offering more interests than bank fixed deposits to attract investors.
Many cash-strapped developers are offering a return of up to 12% per annum to investors if the project is delayed or cancelled.
“Investors enter the project in the initial stage, pay the full sum (price of the property) and withdraw when actual buyers enter or later than that,” said a developer who is coming up with a project in Kalyan, in outskirts of Mumbai. “We are offering our investors 12% return on their investment if the project is postponed by a year or cancelled.”
Around 31% of the projects launched in the past 12 months are delayed by at least 6 months, said Pankaj Kapoor, managing director, Liases Foras, a real estate research and rating firm.
“Investors normally pay less per sq ft price for property than actual buyers and 12% returns is attractive in present situation where the stock market is down too,” said an investor who invested R25 lakh in Shah’s property.