Hot India real estate stocks saw the rise in the demand race expand
(Bloomberg) – The recent weakness in India’s searing real estate stocks could be short-lived as record interest rates and economic recovery from the pandemic fuel demand from an increasingly affluent middle class.
That’s the view of market watchers, who see large listed companies emerging as the biggest beneficiaries amid an ongoing consolidation in the $ 200 billion industry. While the S&P BSE real estate index fell 3.1% in August, the 10-member gauge is up 24% this year and on track for a sixth consecutive quarterly gain – the longest period of data compiled by Bloomberg dating back to 2007.
“The growth and scale of the sector will come from the middle class,” said Sharad Mittal, CEO of Mumbai-based Motilal Oswal Real Estate, which manages cumulative assets of 46 billion rupees ($ 630 million). “Consumers prefer large, well-capitalized, well-perceived developers. “
READ: Resilient demand continues to drive India’s global growth
The Indian real estate market is rebounding after experiencing a bearish cycle over the past six years as a series of headwinds ranging from the pandemic to a bad loan crisis and a surprise cash ban in 2016 dampened demand for news houses and apartments.
According to Murtuza Arsiwalla, director of research at Kotak Institutional Equities, stronger sales and weak launches are leading to faster absorption of exceptional stocks and this favorable supply and demand situation has started to argue for increases. of price.
What Bloomberg Intelligence Says:
Despite the recent surge, India’s real estate sector still ranks favorably against China, the United States and some of the major South Asian peers. For example, the $ 30 billion capitalization of listed real estate stocks in India is only a fraction of China, Hong Kong and the United States, and even follows the smallest Asian markets.
Currently contributing 6% of the country’s GDP, the real estate sector is expected to reach a size of $ 1 trillion by 2030.
– Nitin Chanduka and Marvin M Chen, analysts. Click here to search.
Arsiwalla likes Bengaluru based companies like Prestige Estates Projects Ltd. and Sobha Ltd., he wrote in an August 30 memo. Mumbai-based Macrotech Developers Ltd., whose shares have nearly doubled since their debut in April, and Oberoi Realty Ltd. still offer value at current prices, he added.
READ: Demand for new homes pushes India’s housing index to decade-high
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