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Volume IconCBRE's Anshuman Magazine on real estate's future

In an interview with Business Standard's Nivedita Mookerji, Anshuman Magazine of CBRE South Asia shares why he sees robust growth for the sector which was hit hard by the pandemic

ImageNivedita Mookerji New Delhi
Anshuman Magazine, CBRE, Lunch with BS,

Anshuman Magazine, CBRE chairman (India & South East Asia). Illustration: Binay Sinha

Q: I will begin by asking you the Covid story. What happened to the Indian real-estate sector really during that time?
Ans:

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>First impact of Covid-lockdown was on the ongoing constructions
>Another impact on the sector was investor decision-making becoming slow, because of the uncertainties
 

Q: But, you know, it is said that there was a minor blip on the real estate sector and it was not really a major blow. Is that a correct assessment?
Ans:
>Impact of the extended lockdown could have been much worse for the real estate sector
>Recovery was substantial in a short period of time
 

Q: When you say recovery, are you talking about the residential sector or commercial space?
Ans:
>Recovery witnessed in all segments of real estate
>Recovery in the residential sector started picking up first, because of the pent-up demand
>Low interest rates also drove demand in the residential sector
>India’s office market is primarily driven by technology firms
 

Q: In your recent outlook report, you have charted a growth-path for Indian real estate in 2022. Are you betting on commercials more or on the residential space this year?  
Ans:
>Expects the residential sector to thrive, as people are increasingly looking at a better quality of life
>Office spaces are expected to do better than last year
>Real estate in India undergoing expansion on the logistics side
>Data centres, co-living spaces and student housings are coming back to life after Covid-restrictions
 
 
Q: Isn’t office space the tricky one? Because you don’t know whether it’s going to be a hybrid model or it is going to be back-to-office. Still there are mixed signals. So many companies have given up office space during the pandemic. So, how is it panning out?
Ans:
>Hybrid work model is here to stay
>Technology companies in India are expanding
>Young people want to go out to work
>Tech firms, BPOs, software development companies can leverage a lot of facilities when employees work from office
 
 
Q: There was an interesting survey recently where about 50% of the samples said that they would prefer real estate to any other asset classes like gold or stocks. Do you think the confidence is real? 
Ans:
>The confidence is real specially in Asia, where the mindset is physical asset gives maximum comfort to most investors
>Real estate is an essential part of diversified investment
>Historically, the returns on investment in real estate have been unparallel in India 
>Since it’s an overall undersupplied market, real estate investment will continue to give returns
>Anyone investing in real estate should take an informed decision
 
 
Q: It is interesting that you are talking about informed decisions. Recently there was a case of Supertech, which has gone into insolvency. There are other bad stories in real estate. So, where is the check and is there any clean up that’s happening in the sector?
Ans:
>Too much regulation slows down development, but RERA regulations should be followed
>Investors and home buyers should do their legal due diligence before investing in real estate
 
 
Q: Finally, question on prices. There has been a buzz that construction material prices are going up. Do you see real estate prices going up in the near term? 
Ans:
>Prices are expected to go up, but it’s difficult to calculate how much
>Reason for the price rise, besides demand, is inflation
>Input cost have gone up
>Abnormal price rises are not likely to happen

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First Published: Mar 30 2022 | 8:30 AM IST

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