Wednesday, April 22, 2009

Thank God! Yatra Capital, major investor in Kolte Patil's 78 acre township in Kharadi and Amanora Park Town's Market City, is in no hurry to exit!

"All those who said that we (Indian economy) have decoupled from the US (financial crises) are in for a shock", says Sir Nigel Broomfield, non executive director, Yatra Capital PLC.
Sir Broomfield, non executive director, Yatra Capital PLC., feels that although the prevailing mood in the Indian realty sector is sombre, recent developments make the space attractive in the long run.

ET Intelligence Group caught up with Mr Broomfield to know about his India initiatives and future growth plans. Excerpt from his interview:

Where do you think is the Indian real estate headed?

Sir Broomfield:

The fact that the US is the world’s biggest economy, one just cannot remain unaffected.

It affects different countries in different ways, but real estate (because that is where the trouble started in the US) has been affected disproportionately.

Similar is the scenario with Indian real estate.

Sentiments are down and affordability has been hit the most.

However, the response to new project launches (which are 15-30 % lower than market rates) has been encouraging.

Mortgage rates have also come down by 200-250 basis points in the last three months.

In the long-term , Indian real estate remains attractive.

How soon do you expect a recovery in the market?

Sir Broomfield:

There is definitely more pain to come, but the fundamentals here are good.

India is a huge economy with 45% of the population below 30 years.

Internal demand is huge.

When compared to other economies, India is still growing at 5.5% besides China, which is growing at 7%.

This gives the two countries edge over other economies; hence, foreign investors are still looking at India, though they are not investing yet.

A lot of real estate projects are stuck for want of funds. Will this affect your India strategy?

Sir Broomfield:

The overall market has had a very severe and sharp correction.

However, we are in no hurry to exit, as we are a long-term fund.

Our investors are people, who understand ups and downs of the real estate market.

The stupendous rise in property prices over the last few years lured a lot of people, who came in at a later stage in the real estate market.

They thought that the market will always remain upbeat and they would be able to generate quick fortunes with no trouble. But, they missed the fundamentals.

We believe that our fund strategies will prove to be beneficial in the long term.
To read more, please, visit - Set to beat real estate blues

Hot Pune real estate market news:

Yatra Capital's joint venture with Kolte Patil Developers' was, no doubt, hot Pune real estate market news. It was Yatra Capital's first investment in Indian real estate. Ajoy Kapoor of Saffron Advisors, managers of Yatra Capital, was considered as a hero for daring to invest in Tire II city.

Along with Kolte Patil, Yatra Capital invested in 1.5 million sq feet Market City. Which was going to become not only "largest shopping centers in Pune", but an "engine", revenue generator of Amanora Park Town.

Sir Broomfield's statement about "effect of US financial crises and recession on Indian real estate" is not a news for you. Because all of you, my readers in US and in IT, were talking it for long time.

However, Yatra Capital's plan to remain invested is, for sure, good news for Kolte Patil and Amanora Park Town.

Why you decided to remain invested in Blue Ridge or Megapolis in Hinjewadi?

Let us hope, someday, you, an individual real estate investor, in Paranjape Schemes' Blue Ridge or Kumar Properties and Avinash Bhosale Group's Megapolis in Hinjewadi, would hear some positive news about foreign direct investors in these project!

For you, investing in real estate was not a business decision, but a "life decision".

Don't you think that builder should treat you better?

Don't you think that only 'transparency' is going to build confidence and make you think twice before you cancel your booking?

Please, share with us your story. Tell us, in the comments, why you decided to remain invested in Blue Ridge or Megapolis in Hinjewadi! (Comments Policy),

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  1. Sir Broomfield seems like a very intelligent man, I like his views on the current real estate market crisis. Indian real estate sure looks like a lucrative place to invest. Since the expansion of the metro cities is almost never ending, the real estate must be booming there. I'd love to visit one of these cities to see the real estate infrastructure. Anyways, thanks for the article,

    take care, Elli

  2. Strength of domestic economy will sustain the external challenges. A nation should maintain confidence so that economy will remain afloat.