Bangalore is expected to lead commercial office space growth driven by IT /ITeS and E-Commerce start-ups.

October 29, 2015
An interview with Sunil Rohokale,CEO& Managing Director, ASK Investment Managers

What are the most fundamental changes in Indian real estate since the last investment cycle?

Indian real estate has seen increasing regulatory efforts to improve transparency, providing incentives for affordable housing, and consolidation and easing of regulations to attract foreign investments in the sector. The sector has seen increasing role of Real estate Private Equity as primary source for capital starved industry. Special economic zones lost its attractiveness, while Tier-2 cities are not yet attractive investment destinations. Residential sector demand rose steadily across metros in past 5 years, which has resulted in prices rising past the 2008 levels.

How are ‘new’ international investors likely to invest in India? Blind pools, managed accounts, debt funds, equity investments?

International investors today have a lot of investment opportunities in India. The avenue of investing in income yielding assets will open up with launch of REIT’s. Another option of investing in debt structures with identified pool is also available. The most preferred option is banking up with performance managers with clearly carved out strategy of Blind pools.

What will stimulate the recovery of the resi market in Delhi and Mumbai? And what are the likely time frames?

Enhanced income creation opportunities , interest rate reduction by 50-75 bps coupled with 10-15% correction in prices will improve affordability and lead to recovery in residential demand in NCR (Delhi) and MMR (Mumbai) over a period of next 12 months.

Outside of Delhi and Mumbai, which city and which sector are you most bullish about over the next 12 months?

Bangalore is expected to lead commercial office space growth driven by IT /ITeS and E-Commerce start-ups. This growth in jobs and incomes will keep demand for residential segment robust. Similarly Pune is likely to benefit from growth in IT /ITeS industry and availability of homes in mid-value segment.

Which infrastructure projects in India are likely to have the most positive knock-on effects for real estate?

Metro-Railway projects in various cities are expected to redefine growth in real estate. The inclusion of tier-II cities under the “Smart city” programme is likely to be next growth booster.

GRI in association with The Property Times.in