House of cards

Written by Garima Pant | Updated: Dec 1 2008, 04:41am hrs
As the country was coming to terms with the global economic slowdown, the attacks on Mumbai, the corporate hub of India, has definitely added on to the woes of the investors. Anuj Puri, Chairman & Country head, Jones Lang LaSalle Meghraj believes that by choosing Mumbai, terrorists have attained their objective of getting international attention. In the short term, there will definitely be a decline in cross-border business visits to the financial capital. However, the impact on the real estate market will not be pronounced, since this asset class has a long lead time. Moreover, nothing will change the fact that Mumbai is a key business location in the global context, and that it will continue to be a nexus for the biggest real estate transactions. In the mid-to-long term, global business priorities will prevail.

The industry believes that the attacks have certainly tarnished the image of India and will instil a sense of concern among foreign investors. Kumar Gera, Chairman, Confederation of Real Estate Developers Associations of India (CREDAI) says that restricted foreign investment could be one of the reactions to this strike. However, we have been through such instances in the past and the Bombay Stock Exchange opening up the very next day gives a very positive signal. Navin Raheja, Managing Director, Raheja Developers believes that demand for residential real estate will not get affected by such attacks. There will be impact on investments towards commercial sector which will lead to slowdown of expansionary plans by developers. Extreme slowdown has already happened and theres hardly any possibility of further reduction. India is a strong economy with strong work force and great future ahead.

Also, with Mumbai being the corporate hub, consider this: Federation of Indian Chambers of Commerce and Industry (FICCI) organises one corporate event every month in Mumbai apart from their five major events of the year. These events have the participation of Indian and global corporate leaders. CII too has almost a similar number of events, held annually. And address to these corporate events, a number of times, have been the two hotels under siege-The Taj and the Oberoi Trident Hotel. Scarring the image of India in the global market, uncertainty and fear is imminent, although a FICCI insider assures that this will not impact the future global events organised in Mumbai. For the others, it is a wait and watch scenario.