How do people invest in Indian real estate is beyond me. They are almost impossible to value, are mostly embroiled in cases,have short operating histories and a lot of them have dubious managment.Let me elaborate<\/p>\n
1) I have not found a single brokerage report from the “sophisticated” banks that give any decent way to value these companies. Most of them use NAVs which is a highly subjective number.I am 100% sure that none of the analysts would go out to the field to verify the value of the land that the company possesses.Standard metrics like P\/E,P\/B and P\/S don’t seem to work here<\/p>\n
2) Most of the companies are routinely raided by the tax and excise departments. Emaar, HDIL, Orbit and the list goes on an on. Not a big wonder since most of the deals in the real estate market are rumored to be done with black money. Now a foreign fund IREO joins the list .<\/p>\n
3) Most companies have come out with IPOs in the last 3-4 years so don’t have a long operating history.Organized real estate is a recent phenomenon and most people will dispute that\u00a0 “organized ” real estate is any better than the “unorganized” one. Real estate companies have such a bad service record and routinely break both the spirit and letter of the contract which is anyway loaded in favor of the companies.<\/p>\n
4) Management seems confused as well.Unitech entered wireless and other segments,DLF entered into hotels,mall,multiplexes ,townships . Now both these companies want to spin off these entities to focus on real estate. With these 2 companies supposed to be the best , i wonder at the quality of the smaller ones.<\/p>\n
Real estate compaies had a great run in 2007-2008 till the Great Market Crash , most of the other sectors have recovered to their old highs but not this sector. Not a big wonder given the above points.<\/p>\n","protected":false},"excerpt":{"rendered":"
How do people invest in Indian real estate is beyond me. They are almost impossible to value, are mostly embroiled in cases,have short operating histories and [\u2026]<\/span><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_eb_attr":"","content-type":"","footnotes":""},"categories":[39],"tags":[1247,4253],"class_list":["post-17500","post","type-post","status-publish","format-standard","hentry","category-real-estate-and-construction","tag-corruption","tag-real-estate"],"_links":{"self":[{"href":"https:\/\/iiec-india.org\/greenworld\/wp-json\/wp\/v2\/posts\/17500","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/iiec-india.org\/greenworld\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/iiec-india.org\/greenworld\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/iiec-india.org\/greenworld\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/iiec-india.org\/greenworld\/wp-json\/wp\/v2\/comments?post=17500"}],"version-history":[{"count":0,"href":"https:\/\/iiec-india.org\/greenworld\/wp-json\/wp\/v2\/posts\/17500\/revisions"}],"wp:attachment":[{"href":"https:\/\/iiec-india.org\/greenworld\/wp-json\/wp\/v2\/media?parent=17500"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/iiec-india.org\/greenworld\/wp-json\/wp\/v2\/categories?post=17500"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/iiec-india.org\/greenworld\/wp-json\/wp\/v2\/tags?post=17500"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}