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The Rediff Business Interview/ Akshaya Kumar

'NRIs know India is not going anywhere and are wary of investing in India'

When Colliers Jardine set up office in India five years ago, the objective was to provide the highest professional and ethical services, primarily to multinational companies. How far have you been able to achieve your aims?

I think we have done pretty well as far as professional and ethical services to our clients are concerned. We have substantially achieved what we set out to do. And we have very satisfied clients, including giants like Microsoft who have purchased property in Hyderabad. We have done a lot, but there is lots more that we want to do.

How difficult it is to operate in real estate market when there are criminals and dubious builders in the market? Every day we read of murders and killings related to the real estate business.

Sure, this business has its different complexities and complexions. As long as you play in the boundaries within which you are comfortable, there is no problem. We are comfortable. We are a professional outfit and work with good set of clients.

What is your opinion about the black market? Do you think we need a better system?

We don't encounter this problem, because our clients are not interested in dealing with the black market. We deal only through cheques, so there is no way that we are part of this market.

Much was expected from non-resident Indians returning to India. In your opinion, what has happened?

We have done some marketing for NRIs in real estate in the past. However, some of them have burnt their hands because they did not invest in the right kind of property. I think one reason NRIs are wary today is because they have been hurt in other portfolios too. They are also making more money in other countries rather than India. So, I feel they have adopted the attitude of wait and watch. The NRIs know that the Indian market is not going anywhere.

Moreover, most NRIs already have at least one property in India, which provides the link to the homeland. Perhaps they feel that the Indian market is not good for investment at this juncture. They are patriotic and have an affinity to the homeland is there. But at the end of day, if you don't see returns in dollars, then they will not come and invest. And this is true of people from all parts of the world whether they are Chinese or European. To expect NRIs to invest only because of patriotism is unrealistic and possibly unfair.

Many local brokers feel threatened by the entry of big firms like Colliers Jardine. There are complaints that you have taken almost 30 per cent of their business in the Indian market. What do you have to say?

I think what's happening in the real estate markets is that the organised players are coming in. It is like the stock market. If you look at the stock market, about five to seven years ago, small business, those run by individuals, dominated the scene. It was service for individual clients, and not very well organised. Today, global players have come in, small brokers have improved their operating systems, and the clients have benefited.

Sure, the big guys will take away some business, but small guys always exist. That is what is happening in the real estate sector. At the end of the day, what we have touched in this market is only the surface. This market is very large and I don't think that the small agents need to feel threatened in any way. We will take some business, but there is a lot available for them.

You think that the local agents need not get frightened of companies like yours.

Of course not! They will always have a niche for themselves. But I'd like to make another point. In India, if you want to be an accountant you need to do commerce, if you want to be a doctor you need to do medicine. But for a broker you need only an office and a telephone. And with mobile phones coming in, you don't even need that. I think there must be some kind of regulation for people to transact.

Letting anybody become a broker is not healthy for the market. Everybody has a different set of standards. To provide good customer service and deliver what is promised is not everybody's objective. There are a few persons who will compromise simply to get the transaction. And that is not in the interest of the business. I feel regulation is important and an entry check is essential. Ultimately, it will benefit the industry and the customers.

Besides Microsoft, who are your other clients in India?

We have many clients. Most of them are multinational corporations. I feel taking names is dangerous. We are a closely held company and that is why we do not like to reveal the numbers. Also, we are in a market that is not doing very well. So we only want to satisfy the needs of the customers and we are good in that. Even though the market is down, we are not down.

Interviews