Realty players see silver-lining in stock market volatility
Realty players see silver-lining in stock market volatility
NEW DELHI: The real estate market believes that recent crash and concurrent volatility on Dalal Street have come as a blessing in disguise for them and property will emerge as a key low-risk avenue for the investors. The seven-day meltdown in stock market between January 14-22 caused over Rs 16,00,000 crore of losses for investors amid a plunge of about 4,100 points in the benchmark Sensex and volatile movements are expected to continue despite a recovery of over 1,100 points on Friday. This has led to investors start looking over alternate investment horizons and the real estate developers believe that property could be an attractive option, given a sharp surge seen in its prices in the past couple of years without any major period of slump. "Real estate has always been a good investment. Any kind of investment in property will always be a good one in the future," the country's largest realty firm DLF Ltd's Group Executive Director Rajeev Talwar told reporters. Whenever such crisis happens in the capital market, people start thinking of alternate mode of investment that could give them good results, he noted. "If money goes away from stock market, then a part of that will definitely come into real estate," Talwar added. Echoing similar sentiments, global real estate consultant CB Richard Ellis' Chairman and Managing Director (South Asia) Anshuman Magazine said, "When share market does not perform well, then theoretically investors turn into realty funds. We will have to wait to see the trend (emerge again)." PE fund Red Fort Capital's Director Kuldip Chawlla also echoed the sentiments, saying that after the recent fall in the capital market, people would withdraw money and invest in real estate. "When stock market was falling last week, there was lots of queries regarding low-risk investment options. Land and real estate are such options and people will start investing because it cuts the risks and gives investors exposure to real estate," Chawlla said. Real estate consultant Cushman & Wakefield, however, said it is unlikely that people would immediately start putting money into the property market.
"Rather small retail investors will go through mutual fund route, which give them decent returns with low risk. They are likely to invest in a mix of equity and debt funds," Cushman & Wakefield's Director Kaustuv Roy said. "Though the risk is low, return in real estate fund is also low. And people want high returns," he added. CBRE's Magazine said, however, as the banks have stopped giving loans to the developers for buying land, private equity funds are coming in a big a way in the country and people would invest in real estate funds. "The concept of real estate equity fund is comparatively new in our country... But in the coming years, people will definitely put money in such funds as it contains low risk and high returns," Magazine said. "Sensex has also gained about 109 per cent in the last two years, but because of the risk and volatility, people are turning into the lucrative land and real estate investment," he said, adding that when stock market went down by 20 per cent in seven days, real estate were quite stable. The land prices have appreciated by 340 per cent in the top 7-8 cities and prices of real estate has increased by 135 per cent in the last two years, he noted. "At times, such as these, even the professional money managers are running for cover wondering where to invest with relatively low risk capitals given high volatility in the equity markets," Chawlla said. According to CBRE, land prices have doubled in the last 3-4 years. "In some pockets land prices have been increased by 100-200 per cent. But on an average basis, it has been doubled over the last 3-4 years," Magazine said. "Traditionally real estate investing has been restricted to buying developed properties such as flats or villas or perhaps in plot development. Real estate funds, such as the one being promoted by us, allow investors to get exposure to the pan-India realty market," Chawlla said. RFC had recently launched a Rs 1,000 crore domestic fund, where both retail and institutional investors put money, to invest in developing properties, primarily in land purchase, across the country.
NEW DELHI: The real estate market believes that recent crash and concurrent volatility on Dalal Street have come as a blessing in disguise for them and property will emerge as a key low-risk avenue for the investors. The seven-day meltdown in stock market between January 14-22 caused over Rs 16,00,000 crore of losses for investors amid a plunge of about 4,100 points in the benchmark Sensex and volatile movements are expected to continue despite a recovery of over 1,100 points on Friday. This has led to investors start looking over alternate investment horizons and the real estate developers believe that property could be an attractive option, given a sharp surge seen in its prices in the past couple of years without any major period of slump. "Real estate has always been a good investment. Any kind of investment in property will always be a good one in the future," the country's largest realty firm DLF Ltd's Group Executive Director Rajeev Talwar told reporters. Whenever such crisis happens in the capital market, people start thinking of alternate mode of investment that could give them good results, he noted. "If money goes away from stock market, then a part of that will definitely come into real estate," Talwar added. Echoing similar sentiments, global real estate consultant CB Richard Ellis' Chairman and Managing Director (South Asia) Anshuman Magazine said, "When share market does not perform well, then theoretically investors turn into realty funds. We will have to wait to see the trend (emerge again)." PE fund Red Fort Capital's Director Kuldip Chawlla also echoed the sentiments, saying that after the recent fall in the capital market, people would withdraw money and invest in real estate. "When stock market was falling last week, there was lots of queries regarding low-risk investment options. Land and real estate are such options and people will start investing because it cuts the risks and gives investors exposure to real estate," Chawlla said. Real estate consultant Cushman & Wakefield, however, said it is unlikely that people would immediately start putting money into the property market.
"Rather small retail investors will go through mutual fund route, which give them decent returns with low risk. They are likely to invest in a mix of equity and debt funds," Cushman & Wakefield's Director Kaustuv Roy said. "Though the risk is low, return in real estate fund is also low. And people want high returns," he added. CBRE's Magazine said, however, as the banks have stopped giving loans to the developers for buying land, private equity funds are coming in a big a way in the country and people would invest in real estate funds. "The concept of real estate equity fund is comparatively new in our country... But in the coming years, people will definitely put money in such funds as it contains low risk and high returns," Magazine said. "Sensex has also gained about 109 per cent in the last two years, but because of the risk and volatility, people are turning into the lucrative land and real estate investment," he said, adding that when stock market went down by 20 per cent in seven days, real estate were quite stable. The land prices have appreciated by 340 per cent in the top 7-8 cities and prices of real estate has increased by 135 per cent in the last two years, he noted. "At times, such as these, even the professional money managers are running for cover wondering where to invest with relatively low risk capitals given high volatility in the equity markets," Chawlla said. According to CBRE, land prices have doubled in the last 3-4 years. "In some pockets land prices have been increased by 100-200 per cent. But on an average basis, it has been doubled over the last 3-4 years," Magazine said. "Traditionally real estate investing has been restricted to buying developed properties such as flats or villas or perhaps in plot development. Real estate funds, such as the one being promoted by us, allow investors to get exposure to the pan-India realty market," Chawlla said. RFC had recently launched a Rs 1,000 crore domestic fund, where both retail and institutional investors put money, to invest in developing properties, primarily in land purchase, across the country.
It is really shocking news that the seven-day meltdown in stock market between January 14-22 caused over Rs 16,00,000 crore of losses for investors.
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