Anupam Gupta hosts Gulam Zia, Senior Executive Director of Knight Frank India. They discuss the real estate sector's response to COVID-19, varying pricing of residential real estate, changing perspective towards commercial real estate, builders' reputation, quality of living in different cities, and REITs.
COVID-19 led to an increase in demand for residential properties driven by incentives like stamp duty cuts, but developers often fail to adapt to changing market dynamics.
The office real estate sector was heavily impacted by the pandemic, and lessons learned include increased focus on occupier well-being and minimizing commuting distances.
Deep dives
Lessons Learned from COVID-19 Impact on Real Estate
During the COVID-19 pandemic, the real estate sector faced challenges, especially in the residential market. Prior to COVID-19, the upper-end luxury housing segment was struggling, while affordable housing was performing better due to government interventions. With COVID-19, the situation worsened for developers, but there was a surprising increase in demand for residential properties, driven by incentives like stamp duty cuts. However, the lessons learned from this experience are limited, as developers often fail to adapt to changing market dynamics.
Changing Dynamics in the Office Real Estate Sector
Prior to COVID-19, the office real estate sector was performing well, but the pandemic heavily impacted it. Although the situation has improved, the sector is still recovering. The growth of the office sector is influenced by factors such as global economic conditions, energy crises, geopolitical tensions, and the financial situation of multinational companies (MNCs). Lessons learned in this sector include increased focus on the well-being of occupiers, such as implementing health and wellness measures, considering carbon ratings, and minimizing commuting distances.
The Expensive Real Estate Market and Valuation Factors
Expensive real estate prices are influenced by the value of land, which forms a significant portion of the overall cost. Land prices in locations like South Mumbai remain high due to limited availability and high demand. However, as infrastructure improves in other cities, affordability improves, and new categories of real estate emerge, the valuation dynamics may change. The accessibility to affordable housing and the growing number of urban centers offer potential investment opportunities.
The Role and Importance of Literature and Language
Aside from the real estate sector, literature and language play a significant role in Gilaam's life. He recommends exploring Urdu literature, particularly the works of renowned writer and poet Ghalib. Ghalib's poetry reflects deep insights and thought-provoking perspectives that remain relevant today. Urdu, a language originating from the mix of Arabic, Persian, and various dialects of Hindi, has a rich literary tradition that can provide a different perspective and appreciation for the language and its timeless works.
On this episode of the Paisa Vaisa podcast, Anupam Gupta hosts Gulam Zia, Senior Executive Director of Knight Frank India. The duo talks about real estate sector's response to COVID-19 in both residential and commercial segments, how residential real estate's pricing now varies widely across segments, changing perspective towards commercial real estate, Builders' reputation, quality of living in different cities in India and REITs.