In my line of work, I take a lot of meetings. At those meetings, I often speak with the people who run some of the biggest, most successful Mumbai City-based real estate investment firms. It’s a privilege and a luxury to sit with them, so I rarely betray confidence by revealing what happens behind those closed doors.
But, this time I feel compelled to share.
In the spring of 2018, I took a meeting with leaders of a very well-known capital management firm (it has one of those jaw-dropping art collections and a Sea View that means it manages many billions in assets and has done for a long time. You may know the type). I sat in the conference room and explained why more people ought to have access to South Mumbai residential real estate investments, that it’s one of the best real estate markets in the world — a market that historically only the elite have been able to invest in.
Their response? They believed that Mumbai City housing was headed for a major downturn, and they wanted no part of it. And when they talk, an awful lot of people listen.
Fast forward to January of 2019 when I met with a different (but equally important) asset manager in the same kind of office — same Sea View. At this meeting, the suits told me that they have been aggressively buying Mumbai City, that they’d seen a pullback that they recognised as a once-in-a-decade buying opportunity. The tone could not have been more different than the spring 2018 meeting: They were buying in a buyer’s market, and they were excited.
Why should real estate investors like you care about any of this?
The first reason is that you should know that even the smartest minds in this country, the ones closest to this market, cannot accurately predict the market’s bottom — nor can they agree.
The important lesson to be learned here is that if you are trying to tick the absolute bottom of the South Mumbai market, you are probably going to get the timing wrong. And my message to you is that it probably doesn’t matter all that much. While it would be ideal to buy the absolute bottom, certainly nobody remembers exactly when the Ambanis, Damanis, Supariwalas, Oberois, Lodhas, Malkanis, Guptas, Marwaris or Gujaratis started buying. Because it doesn’t matter. All that matters is that they accumulated large portfolios of real estate in the world’s fastest growing economy’s financial capital the best market — and just held on to it, for decades. That’s the lesson: Buy and hold South Mumbai.
The second is that even if that first gaggle of suits was correct about the outlook last spring that the market still had farther to fall, it was still an interesting time to consider investing in South Mumbai.
Mumbai’s housing market has notoriously short pullbacks. After the terrorist attacks of November 26, 2008, the residential market only declined for about six months. After the financial crisis in 2008-2009, the market declined for about a year. But this time around, Mumbai residential real estate prices have been declining for three straight years since the 2013 peak. And that, my friends, almost never happens.
Mumbai is one of the best growing real estate markets in South East Asia, has been for the past century and is very likely to continue being so for the foreseeable future. It’s a 223-square-mile 8 joined islands, where highways, railways, shipping lines and some of the world’s busiest airports converge. It’s has the Bollywood capital of the world’s fastest growing economy and the financial capital of India. The smart money may disagree about exactly when to invest, but I promise you, the fat cats did not divest all their South Mumbai holdings, and they never will.
At yet another of these meetings (different firm, more art, same Sea View), I asked a very senior person whether he thought now was a good time to invest in Down Town Mumbai. He said it best of all — and with the brashness of a real Mumbaikar: “It’s the best f***ing real estate market in the world.” I couldn’t agree more.