Real estate developers are worried about the safety of their projects and planning for insurance cover against it after the recent attacks in finance capital of our country. Currently, only a few developers take insurance coverage for all their projects and  DLF is one of them.“We have been taking insurance cover against terrorism for our projects for the past two to three years,” said Ramesh Sanka, CFO, DLF. 

Delhi-based real estate firm, Omaxe is considering taking insurance cover against terrorism “for the commercial and retail projects,” Vipin Agarwal, executive director, finance, said. He pointed out that the residential projects ultimately come under the purview of residential welfare association (RWA) and, therefore, it is for them to decide on insurance cover.

Another Delhi-based real estate developer, BPTP said that there aren’t enough insurance products available in the market. “I don’t think there are too many products available from insurers to cover terrorism in our country,” Abhinandan Chatterjee, CFO, BPTP, said. The terrorist strike has also made the fund-starved real estate sector further wary about the flow being further squeezed.

“Rating agencies will include the country risk factor when it comes to India from henceforth. India will be considered unsafe,” said Amitabh Chakraborty, president, equity business, Religare Securities. The country risk classification method measures the country credit risk, and how is it likely to service its external debt.

Country risk refers to the changes in the business environment that adversely affects operating profits or the value of assets in a specific country. This term, sometimes referred to as political risk, imply– potential losses due to riots, civil-war and terrorism.

“While the impact will not be healthy, there will not be any direct impact on the realty sector either,” said, Shobhit Agarwal, joint managing director, capital markets, Jones Lang Lasalle Meghraj.

As far as fund flow is concerned, said a Mumbai based analyst, “during the last quarter of a calendar year, foreign fund flow reduces anyway compared to the second and third quarter. So, it is not strange that it has gone down now. It will probably pick up from early next year.” There may not be any immediate impact, said Chakraborty, “but the currency will come under pressure.”

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