It is a bit early to predict the full impact of Donald Trump’s win in the US presidential election on Indian real estate, but early indications are that quite a few companies and investors are reassessing their investments in the sector.
This comes on the back of the dollar going down, which can lead to Indian rupee to witness some volatility, creating some amount of uncertainty and anxiety.
Currency fluctuation
Anuj Puri, Chairman and Country Head, JLL India, said, “For real estate investors, currency gains might be sufficient to prompt global investors to execute exit strategies on cross-border investments. In fact, large institutional investors would be well-advised to implement investment strategies now, before the market picks up again. Asia Pacific, and to some extent India, could stand to gain if investments pick up.”
Echoing a similar sentiment, Shishir Baijal, Chairman and Managing Director, Knight Frank India, said: “A great amount of global uncertainty on account of the US elections is now put to rest. We look forward to the President-elect to further strengthen the bilateral relations with India and for the trade to grow to new heights.”
However, Liam Bailey, Global Head of Research, Knight Frank, said: “There may be a period of instability in currency markets, which will influence some short-term decision-making around asset allocation.”
As for the exit strategies, Baijal said, “The uncertainty in the US economy that will prevail till the new policies are formalised and laid down could spur increasing amount of interest from cross-border real estate investors into markets such as Australia, Japan, Europe and India. At this point of time, investors are staying put. People are watching and will be keenly waiting to see the President-elect’s policies in the new calendar year. Till then it will be status quo.”
“On the larger front of Trump's victory, the overall sentiment implied by statements that he has made so far with regards to India can have some positive political implications. That said, there are definitely concerns in terms of how Trump’s win can affect outsourcing to countries such as India,” said Puri.
“The country's real estate sector does depend a lot on the commercial real estate demand generated by this sector. Likewise, the entire IT/ITeS sector has had a direct correlation to residential demand in the country,” he added.