It’s Exciting Time for Indian Real Estate, says Knight Frank’s Waters
Global investors’ appetite to invest in the country is growing, says Jeremy Waters
Mumbai: India’s real estate market, particularly the commercial segment, is increasingly finding favour with global investors and the next 18-24 months will see new sovereign funds, pension funds and large public institutions enter the country, according to Jeremy Waters, head of international capital markets at London-headquartered property consultancy Knight Frank.
“It’s a very exciting time for India. We are getting more queries and requests for research on India. The country is being viewed by more investors globally than ever and the appetite is likely to growth further,” Waters told ET in an exclusive interaction.
The optimism generated by Prime Minister Narendra Modi, new legislations including Real Estate Regulatory Act and that for real estate investment trusts along with efforts to bring in transparency into the country’s property sector are encouraging international investors to look at India, he said.
Foreign investors, including Blackstone Group, Singapore’s sovereign fund GIC, Canada Pension Plan Investment Board (CPPIB), Goldman Sachs and Qatar Investment Authority, have already been investing in India’s real estate assets for the past few years. Waters said the scenario, in terms of transparency and structures, is still evolving and the investment inflow will be robust after it unfolds further and settles down.
“There are still some risk factors attached to it. Can you calculate all the risks associated with India now? Yes, you are in a much better position as compared to a couple of years ago. Risks couldn’t have been quantified earlier. Now they can be and that’s what an investor wants,” Waters said.
While India continues to be an emerging market, investments into the co- untry will also increase given the rising “uncertainty and nervousness” across the world including China. The list of countries that will return money with good yields is getting shorter due to growing uncertainty, but India continues to be part of that list, he said.
Foreign investors’ appetite for Indian realty is on the rise owing to relatively better economic growth and therefore returns. In 2015, overseas PE players invested about $2.3 billion into the sector, as per a Knight Frank estimate.
“If we are selling a London building with asking price of $200 million, we would go to North America, China, Middle East and Europe. Two years ago we would have not considered India, but now we will,” Waters said. “Indian institutions and even high-net-worth individuals can be prospective buyers for such properties not only as developers but as investors,” he said.
The list of countries that will return money with good yields is getting shorter due to growing uncertainty, but India continues to be part of that list
BULLISH OUTLOOK Jeremy Waters