Real estate consultancy services company Cushman & Wakefield is looking at Indian buys to consolidate operations. The consultancy sees the real estate sector adopting a cautious approach this year. While many global investors are keen to come in , they want the reforms expedited to before making their moves. Sanjay Verma, Chief Executive Officer, Asia-Pacific, Cushman & Wakefield, spoke about various issues that are confronting the real estate sector during a recent visit to Hyderabad. Excerpts:

What are the prospects of the Indian realty market?

The real estate (sector) hit its peak during 2002-2007, and the financial crisis saw it touching a new low. Thereafter, there has been fairly good recovery. The markets across residential, commercial, both rental and capital, will grow at a slow rate or possibly even remain flat. Just as last year, if the first half so far is any pointer, the year will see a flattish trend. India continues to a big demand driven market. It is basically a large middle class story. There is unlikely to be much correction in prices.

There seems to be delay in funds coming in ? What is your assessment?

Clearly, there is a funding crunch in the country. This has been a challenge mainly due to macro-economic factors such as current account deficit; the currency is possibly at its worst in years and interest rates are ruling high. There are concerns on both the demand side as well as the supply side. Input costs, including labour have gone up, the funding is hard to come by. More than $2 billion private equity funding has potential to come into the country. But they have adopted a wait and watch mode. More than $8-10 billion was infused into real estate in the last 10 years. PE players prefer a steady return of say 12 per cent to high uncertain return of 20 per cent.

What is holding up their investments?

The uncertain macro economic conditions, delays in taking decisions to correct course, and also implementation of already announced moves. Implementation of the Goods and Services Tax, Direct Tax Code, Real Estate Regulatory Bill and Land Acquisition and Rehabilitation Bill, are very vital to accelerate the growth and also attract investments. There has been too much back and forth on foreign direct investment in the retail sector. This has potential to attract lot of investments. If all these issues are resolved, we will see good flow.

How do you see your India business growing?

We have more than 1,500 people here and play an advisory role. The company recently acquired a Singapore-based project management specialist company Project Solutions Group. We are looking at making couple of acquisitions in the Indian market. The idea is to quickly consolidate. The market opportunity is huge. China and India will continue to be big markets driving growth.

> rishikumar.vundi@thehindu.co.in

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