‘My realty investments have bettered those of equity ’

livemint.com:

Edited excerpts from the interview: It has played out really well. For me real estate has outperformed the equities portfolio. If you remember, around the end of 2020 and early 2021, the stock market had already recovered from the covid lows.

But as far as real estate was concerned, there were lots of doomsday prophecies. That was when I took a contrarian view and diversified my portfolio into real estate. This move happened primarily because I read the book Capital returns by Edward Chancellor.

It said ‘the sector which will do well is a sector which has gone through consolidation among a number of players and which has seen the least amount of capital deployment in the past 10 years.’ From 2010-11 till 2020, real estate went through a terrible time with many attacks on the parallel economy due to the goods and services tax (GST) regime, demonetization and other reasons. There were so many challenges and phases whereby real estate had a lean patch but I see real estate as another way to participate in India’s economy Around half my portfolio is still in equities and I ensure that it doesn’t go below 40-50%. I will start rebalancing in favour of equities in the next 12 months.

When I say that my real estate is performing better than my equity portfolio, most people will not believe it. But I’ll tell you how it works. If you put in ₹2 crore, then the bank can sanction you a loan of ₹8 crore and with it you can buy a property worth ₹10 crore.

If you lease this property to any major bank to run a branch, then the lease is locked in for the next 10 years. Secondly, the rent goes up by 15% every three years. And imagine if you had bought this property at the bottom of the real estate cycle, during covid, then you would have