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

The Economic Times - - Companies - Kailash.Babar@ times­

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


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