The depressed real estate sector may need a long period of correction and little is expected to happen till the general elections, according to Sanjay Dutt, Executive Managing Director, South Asia, Cushman & Wakefield (C&W).
He said that while in 2008, after the Lehman crisis, the sector had bounced back, this time around, the period of correction might be longer. “Nothing will happen till the elections or unless the government announces measures to change the dynamics ... then there may be some recovery. Rolling out GST and increasing government spending are some of the measures that can spur the real estate market,” he said. Nationally, there has been a drop in absorption in office space and high-end luxury residential properties, according to C&W studies.
The firm also announced its acquisition of Lemongrass advisors, which is part of its expansion plans for the eastern region.
The acquisition is unique in the sense that a corporate takeover was avoided in this instance to avert regulatory hassles and other necessary processes such as due diligence.
Mr. Dutt also said that C&W was planning to enter Bangladesh and Sri Lanka. While it will set up office in Dhaka by 2014, Sri Lanka may follow a year later. With the Lemongrass deal, its eastern region strength will increase to 65 from 42. Mr. Dutt claimed that this was the first deal of its kind in India.
Abhijit Das, former Founder and Managing Director of Lemongrass, who will now be leading the Kolkata operations as Office Director East India, C&W, said that the Kolkata real estate market was promising and in the residential market, demand exceeded supply.
He said that after a specified time, Lemongrass would be allowed to die a natural death.