The mood will certainly be cautious but nobody stops doing business

Bangalore: Colin Dyer, global chief executive and president of Jones Lang La Salle (JLL), and Anuj Puri, chairman and country head of the property advisory’s India unit, talk about their concerns and anxieties over the Indian real estate sector; Puri says big-ticket land deals will continue in Mumbai despite the economic slowdown. Edited excerpts:

What is the biggest change that you notice in the real estate sector here since you visited India last year?

Dyer: The biggest change that has probably occurred in the real estate sector in India over the the last 18 months or so is that both investors and corporate clients have a lot of doubts and are asking a lot of questions today which I didn’t notice earlier.

In a slowdown-like situation, how does it impact business for an international property consultant such as JLL?

Dyer: Well, we continue to hire people and will keep investing here. So far, our business in India has focused largely on office space and retail, but we are also looking at developing the residential business now in our portfolio.

Puri: We have a full-fledged residential vertical now based out of Mumbai, which is doing business in markets like Chennai, Bangalore and Mumbai. We have a detailed plan for residential (sector) and will also enter NCR (National Capital Region) and other geographies. However, we are tying up with developers and selling residential stock to corporate employees unlike others, who mostly sell it to investors.

We are also exploring getting into industrial brokerage, as there’s a lot of opportunities there.

What about office space leasing and selling, which is your core business in India?

Puri: The office space business constitutes about 50% of our India portfolio. However, office space demand is down 15% compared to last year and rentals are at a bottom right now and they will gradually improve going forward.

With everyone talking about the slowdown, what do you think the mood is going to be like for real estate over the coming months?

Dyer: The mood will certainly be cautious but nobody stops doing business.

What does the recent Rs. 2,700 crore mill land deal between DLF and Lodha Developers reflect on land prices? Will we continue to see big ticket transactions?

Puri: Land prices have certainly come down in other cities, but in a city like Mumbai, where land is in acute shortage, prices have held up. So despite factors like liquidity challenges faced by many developers today, there will always be appetite for such land parcels.

madhurima.n@livemint.com

Source: www.livemint.com