Let us talk about some of the key takeaways from the latest report that has come in. The fact that India is going to record the highest growth in UHNWIs (ultra high networth individuals) in the next five years. Which are going to be the factors that will lead to this?
Gulam Zia: What is very evident is the very unique position the Indian economy is in right now? While globally there are recessionary trends in many of these countries, India on an average 7% growth in GDP is an outlier and that has a direct impact on the individuals who are getting into or barging into the ultra-high net worth individual bracket and that is something which is what this report talks about, some 13,200 odd as the number today and expected to grow at the rate of 50 plus percent per annum.

Globally, that percentage is hardly 28% but in India it is almost double of that and last year as well while the global percentage of growth in UHNI numbers was barely about 4% in India, it was 6%. Overall, these are stark numbers that the economy is impacting the creation of wealth and wealthy.

Frankly speaking would not this slow down because the base effect has kicked in and the growth rate is not going to be that strong.
Gulam Zia: Well, that was a year back. 2022 is when we saw a reduction in that number obviously because of the pandemic and its after-effects but in 2023, there was a bounce back, not just in India but globally. That was a year when pretty much everywhere, the high net worth individuals were much lesser, but the turnaround is spectacular and as I was talking about a short while back India because of its unique economic position has been creating a lot many of these UHNIs than the rest of the world.

The report says demand from ultra-HNIs will come. Is it a clear indication that one should invest in the luxury real estate end of the market because that is where the bulk of the flow would move in?
Gulam Zia: I would not jump to that conclusion because we are looking at the investment patterns from specific categories of UHNIs. It is not just financial gains, it also has a lot to do with investment of passion. So, it is like you are showing off the possessions that you have and that they need not necessarily be linked to the gain in your investment returns and that is very evident when you are talking about the other category of watches, art and so on and so forth.

While a few of them have given spectacular results in the last 10 years, real estate has not really been giving that kind of growth in the last year or year-and-a-half. While ‘23 was an outlier for ultra luxury residential apartments also, but even there the rise is 7% to 10% as we speak right now as well and projected numbers are also not very different. If we are looking at it from my perspective or perhaps most of the midstream perspective, the perspective remains the same that it is not going to grow as much as what you would want it to be, unless you want it for passion.You have a column dedicated to what $1 million can buy in Delhi, Bombay, Bangalore. Where do you think the maximum appreciation would be or perhaps where the maximum square is going to be reducing the most?
Gulam Zia: Well, currently, it is Mumbai among the Indian cities and which is evident in that specific chart that you are talking about. Mumbai is in eighth position today. Delhi is in 39th position and Bengaluru almost 59th position. It talks about how much area you can buy with that money and that is shrinking. As I said, it is directly related to the 7-8% price rise that we are watching. While in Manila barely about 160 odd square feet can be bought with that amount. Mumbai still offers about 1200 square feet. So, there is a difference between the costliest real estate in the world, residential prime real estate vis-à-vis where we are in India. But the other two cities are way behind. Mumbai is the only one which is ranking in the top 10.

And residential as well seems to be booming. But maybe it was a bit challenging last year in terms of commercial real estate 2023 at least. Any reversal being seen for this year and years ahead for commercial real estate?
Gulam Zia: I beg to differ from your perspective. I think 2023 was a fantastic year for commercial real estate also, almost touching the same numbers as what it was pre-Covid. At least in India, 2023 was a bounce back year. Again in the rest of the world, commercial real estate is in a bad situation, in India it is a different story and that is also a couple of main reasons.

The key reason is the growth of the global capability centres (GCCs). The Indian manpower resources, human resources have climbed way up on the qualitative aspects and here now we are getting into high end research and that is what it is calling for better office space, larger office spaces because retention of that human resources also is a big question.

That is where going forward we do see a big growth in commercial real estate as well. As I said, 59 million square feet of area was absorbed in 2023, which is just a tad lower than what it was pre-Covid of about 60 million. So, we are looking at at least 7-8% of growth in 2024 as well which will be historic best for India as far as commercial real estate is concerned.