Residential real estate poised for strong bounce back: Mohit Malhotra of Godrej Properties
The residential real estate sector is poised for a strong comeback as affordability is at the best, says Mohit Malhotra, Managing Director & Chief Executive Officer, Godrej Properties. Speaking to ET Now, he said, “once the economy comes back we will see a very sharp recovery in the residential real estate sector. because affordability is at all-time high. Repo rate of 4.4% is the lowest ever in the history of last many years. Players like us who are the leaders in the industry, would definitely benefit from both demand revival and also consolidation, which is going on in the industry.”
Malhotra further said that repo rate, which at present is 4.40%, is even lower than the rate prevailing during the 2008 financial crisis, which will lead to demand revival in the residential real estate sector. He said there may be a disruption in the short term (6-9 months) but it will soon bounce back.
However, speaking on the commercial real estate sector, the CEO of Godrej Properties said, the current downturn in the sector may take some players out of the business. “This (Covid outbreak) will lead to lot more consolidation in the industry. You will see emergence of very large real estate players in the country,” he added.
- Real estate sector has been under pressure for a very long time
- Work has started in few cities, things still at a standstill in Maharashtra
- Current situation will accelerate the consolidation in the sector
According to Malhotra, the top 10 players in the real estate sector in India have a market share of 11% but in China, top 10 players have a share of 30%. Very soon we are going to see a similar situation in India as well, he said.
On restarting of business post the lockdown, he said Godrej Properties‘ office in Bengaluru is open and construction has started there. Even in Gurugram, construction has started on few sites and few are going to open soon, he added.