"Buy land - they are not making it anymore," Mark Twain famously said, and foreign investors are frantically rushing to follow his advice in India. According to "Future of Real Estate Investment in India", a study published by the Associated Chambers of Commerce and Industry of India (ASSOCHAM), the real-estate market will grow to US$60 billion by 2010 from the present $16 billion. Foreign direct investment (FDI) is expected to provide $25 billion to $28 billion.

FDI's share of the Indian property market will expand by at least 10% by March, says the ASSOCHAM study, primarily because of global real-estate players hugely interested in the Indian market, with particular demand for office space for the information-technology and business-process-outsourcing sectors.

In Mumbai, India's financial capital, companies are renting office space in downtown areas near the airport for upwards of $168,000 a month. The cost-of-living implications for the local population - who are already facing acute housing and office space shortages - are profound. A local newspaper reported on December 2 that an apartment was sold for a record $4.2 million in the well-known Maker Chambers in uptown Cuffe Parade. But Gurgaon is not also far behind Mumbai, all the multinational companies are turning towards Gurgaon, as it emerged as an IT place in the last few years.

Surprisingly, Macquarie Research also says that there is much less office space in India than in other Asian countries and cities. "Mumbai has just 12 million square feet [about 1.1 million square meters] of office space, compared [with] 70 million square feet [6.5 million square meters] in Singapore." The boom was fueled by the Indian government's decision to allow 100% FDI in the construction business from March 2005. Earlier, only non-resident Indians and persons of Indian origin were allowed to invest in the housing and real-estate sectors.