India's Primary Real Estate plans $500 mln fund

Foreign investors have taken advantage of such funds to rush into property development in India since it eased rules on inward investment in the construction industry in early 2005, sparking rampant land speculation and a near quadrupling in prices.

But despite signs of a slowdown -- home sales volumes have fallen by one-fifth in Mumbai and 40 percent in Bangalore in the last year -- the head of Primary Real Estate, Ashwin Ramesh, is convinced that North American and European investors will invest.