Real estate demand continues to stay strong; buy strong players: Hiren Ved

economictimes.indiatimes.com:

«Today, you have the BlackRocks and the GICs of the world, sovereign capital which is available. High quality institutional capital is available to the real estate industry and we have RERA, so there is far more regulation, balance sheets are deleveraged, and demand is pretty strong,» says Hiren Ved, Director & CIO, Alchemy Capital.

So, buy all India players, buy regional players, what should one do?
No, just buy strong players. See, real estate, by and large has been a local industry. There have been few players like Godrej, etc, who have been all India.

Godrej, DLF, Macrotech, three.
Three large ones and then you have the few ones which are focused in the South. But now, I think everybody is getting everywhere because what happened was that the industry got massively consolidated. So, the number of players in each geography really shrunk. Now, one guy cannot capture all opportunities and therefore, a Prestige has now come to Bombay for example. They are going to Delhi. DLF has come to Bombay. So, I think the strong players who have a balance sheet and unlike the last cycle where they were massively leveraged, there was no organised capital available to them, so they were borrowing from NBFCs and they were borrowing from very high cost sources.

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