Byline: Arpit Singh, Xander Investment Management
India’s real estate market has come to a standstill. Home sales, residential construction fall sharply as the economy faces its worst slump on record due to the coronavirus pandemic. When investing in real estate, the goal is to put your money to work today so you have more money in the future. Arpit Singh, Managing Director, Xander Investment Management, decoded the outlook for the Real Estate Investment in near future.
Analyzing the impact of Covid, Arpit said, At this point of time where we stand, we’ve all kind of been through the last 18 months and it’s been an extremely volatile period for the real estate industry in general. And it’s been kind of a roller coaster ride for investors, sponsors, operators in the space and I think that’s going to continue at least for the next twelve to twenty-four months”
Explaining the real estate investment landscape in India, Arpit affirmed, “Since the late 2000s, top down, if you look at it, you analyze the Indian real estate market as a global investors, the market continues to remain attractive because the macro themes, including the demographic profile with a young population expanding and more affluent middle-class growing urbanization Etc.”
“But when you start looking at things bottom-up, which is where India starts becoming a bit challenging. There are a lot of execution challenges that were there when the sector started opening up the early 2000s and they still continue to remain, whether it’s the changing regulations, Land Title issues, lack of transparency in the process, governance challenges, delays in entitlements development, etc.” he added.
Stressing on the outlook of near-future real estate investments, Arpit maintained, there are four estimates that can help to predict the upcoming years.
1. There is a thrust for yield globally. And I think this is going to continue and even for India, I expect that a lot of majority of the private Equity Investments and the in the real estate space are going to continue to be focused around these income-generating / yielding assets.
2. General market is going to shift and the attention of investors also going to shift towards people and teams and companies and projects who are able to differentiate themselves on quality.
3. The customer Centric, approach across all real estate verticals is evolving for the last several years. It is something that is going to continue and investors’ focus is also going to be on operators and sponsors who are able to connect directly with the customers in the maximum and the most efficient way possible.
4. Deal sizes in India will continue to be large, but the deal volumes will continue to be low.
Categories: Venture Capital