Global investors eyeing Indian real estate market

NEW DELHI: With the new government taking charge at the Centre and the investor-friendly announcements in its first budget, global investors have got interested in the Indian real estate market once again, Tod Lickerman, global chief executive officer of property consultancy DTZ, has said.

“There are a lot of people who have started talking about and thinking about India again. They all feel confident about India because things are already changing, but say that they are now waiting for a few more things (from the government) to prove that India is going to be an investment-friendly market and is going to invite FDI in various other fields,” Lickerman, who is in India to meet business leaders and to “get a feel” of what is happening in the country after the regime change in Delhi in May, told ET.

DTZ works with top global companies, helping them search properties to house their offices, stores and factories. It is also among the leading providers of facilities management. Real estate consultancies are usually the first to get a sense of the prevailing business sentiment as companies lease or acquire real estate to expand their businesses in good times or freeze such plans amid a slowdown.

Interest in India has been higher since elections also because of the global recovery, Lickerman said, adding that it would take a little time before it started yielding investments. “But the first thing is interest and awareness. There was a time when India wasn’t top of mind. But now it is being talked about. So I think it is a precursor to it,” he said.

After a few more positive signals, India could actually see a lot of money coming into real estate, he said, though he did not hazard a guess on how much the FDI inflows could be. Much of this money would go into development of commercial buildings — offices, stores and malls, as over the past few years builders and investors have neglected this to focus on the residential segment where there is a glut.

With the revival in global economy – especially in the United States and Europe – people are more bullish and looking for property to invest in, he said. “It’s just a matter of time and a little bit of track record to say that it’s a friendly place to be.”

While DTZ itself has not raised a specific fund for India, the conditions are now ripe for one, he said. What is also working for India is that over the years, the quality of commercial assets has improved and these assets are attractive to investors as well as sustainable, he said. “I think previously there was a short-term view of the assets in terms of lifecycle of the buildings but now there are quality assets with great companies occupying them both from a multinational and domestic perspective,” he said. In India, DTZ is focusing on growing its facilities management business. This business brings in over 60% of the company’s revenues globally – of its $2.2 billion global business, about $1.4 billion comes from facilities management, which is a high revenue business.

Source: Economic Times