Japanese real estate developers are deepening their push into India, attracted by rising rents, stronger economic growth, and comparatively lower construction costs.

With pioneers like Mitsui Fudosan and Sumitomo Realty stepping up investments and scouting new opportunities, industry experts say more Japanese players are preparing to enter the market—drawn by significantly higher returns and growing confidence in local partnerships despite India’s well-known regulatory and construction challenges, according to a Reuters report.

First case in point is Mitsui Fudosan, Japan’s biggest property developer, which forayed into India in 2020, partnering with local developer RMZ Real Estate to build an office complex in Bengaluru.

Mitsui Fudosan could embark on fresh investment of 30-35 billion yen ($190-$225 million) or more in projects with either RMZ or other developers, said two sources with knowledge of the plans.

Last month, members of Mitsui Fudosan’s management team were in Mumbai and the region around the capital New Delhi looking at opportunities, they added, declining to be identified as the information was private.

Mitsui Fudosan declined to comment. RMZ declined to comment on the potential new investment.

RMZ Real Estate CEO Avnish Singh did say, however, that Japanese developers are kicking into higher gear now that trust with local partners has been established.

“The floodgates can open and have opened,” he said.

Sumitomo Realty and Development (8830.T), opens new tab, Japan’s No.3 developer which describes Mumbai as its second engine of growth after Tokyo, has committed $6.5 billion across five projects in the city, including two sites added this year.

It is also scouting for land around a soon-to-be operational Navi Mumbai city airport for new investment, said a senior industry source familiar with its strategy. The source declined to be named because the information was confidential.

Sumitomo Realty did not respond to a request for comment.

Japanese companies are far from the only overseas investors keen on Indian property. U.S. investment firm Blackstone (BX.N), opens new tab, for example, is India’s biggest commercial landlord, and roughly half of its $50 billion in Indian assets are in real estate.

Like Blackstone, most foreign players purchase existing assets given India’s notorious reputation for construction delays that can leave prospective tenants and buyers high and dry. Although reforms in recent years have improved construction timelines and created a new framework to resolve disputes, acquiring land can be very slow, involving much red tape.

“Japanese investors are one of the few willing to take development risk. They like to roll up their sleeves,” said Singh.

Despite red-tape headaches, the returns can be worthwhile.

“Expected returns in the Japanese market are maybe around 2-4%. In India, you can easily expect 6-7%,” said Seiji Ota, a partner at Deloitte India who focuses on Japanese investments in the country.

Ota and Singh said a number of other Japanese developers want to make their first foray into India and are assessing opportunities to develop office, retail and hotel projects.