Summit Notebook

Exclusive outtakes from industry leaders

from Sakthi Prasad:

From coffee beans to brick buildings

M.R. Jaishankar of Brigade EnterprisesM.R. Jaishankar, chairman and managing director of real estate firm Brigade Enterprises, the youngest of 12 siblings, started his career in the family business of growing coffee beans.

 But after a nasty labor dispute, which resulted in the burning down of his factory in 1984, he saw an opportunity in the real estate business in the then sleepy Bangalore city -- and tasted big success.

Jaishankar said his first real estate loan of 10 million rupees in 1984 was considered so large that it had to be approved by the bank’s board of directors.

 In contrast, he said in today’s IT-driven Bangalore, a loan of 10 million rupees could be approved at the level of a branch manager.

from Sakthi Prasad:

Real Estate – To invest or not

Abhijit Mukherjee of Dr Reddy'sEveryone of us has our own ideas about a dream home and usually wonder if it makes a good investment or not. 

But for Abhijit Mukherjee, president of the pharma firm Dr. Reddy’s, the choice is very clear -- He is not a big fan of real estate investment. 

A bubble in the real estate market?

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INDIA-URBANISATION/Have you tried buying or renting a house in Mumbai recently? If so, then I won’t be surprised if you think real estate prices are plain expensive, and incredibly so. But that’s almost always been the case in India’s commercial capital. After all, when was the last time someone told you they got a cheap house in the city?

So is the real estate market in a bubble? We asked Adi Godrej, the man who controls Godrej Properties, if things could get bubblicious. This is what he had to say: “I don’t think we are in a bubble, because demand is strong, but we could get into a bubble.”

from Raissa Kasolowsky:

Dubai is super enough, thanks

Dubai has sufficient superlatives – record-setting landmarks unique in their size, cost or concept -- to last it for the next decade – so enough already, says Deyaar CEO Markus Giebel.

“I endorse having the tallest building in the world, the first seven-star hotel in the world, the palm,” he says. “What I don’t endorse are attempts to now outdo these superlatives…they are going to last us the next 10 to 15 years.”

AUDIO – Real estate’s ugly confluence

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All week, we have been meeting real estate executives at Reuters Global Real Estate Summit who have discussed the many different areas of concern that have spread throughout the sector.

Some have spoken about deleveraging. Some have told us about the shrinking of values. Others have said it’s a confidence game — as in, there isn’t any.

Smaller cities’ real estate to stall- what are your town’s prospects?

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New York and a handful of other major U.S. cities are down, but will never be out as far as their commercial real estate goes, a leading New York real estate private equity investor said Monday at the Reuters Global Real Estate Summit.

“New York’s not going away- it’s THE global city.”

Second tier cities are another matter entirely, said Thomas Shapiro, president of GoldenTree InSite Partners. “We are a big believer in the big city theory which is that the bigger cities will continue do better, to the detriment of secondary cities.”

AUDIO – A new emerging market for real estate

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Remember the good old days where — if you lived in the United States anyway — people would talk about “emerging markets”?

We’d nod our heads knowingly, wishing these poor folks the best as they tried to accumulate the swell things we had bought for ourselves. We knew that residents of Mumbai or Caracas or somewhere would never attain the great things we had in such abundance here in the good old USA (Hummers; his and hers monogrammed dishtowels; zero down, 110% mortgages on houses we couldn’t afford … that kind of stuff), but we still wished them well.

AUDIO – Pulte Homes and the Cycle

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It’s not a motorcycle or a unicycle – we’re talking the overall real estate business cycle.

While the bulk of the focus at this year’s Reuters Real Estate Summit is on the commercial real estate side of the business, Richard Dugas, chief executive of Pulte Homes, spoke to us about how things look on the residential side of the aisle.

from Global Investing:

Clear road ahead for depressed Dubai

Dubai's deepening real estate slump has brought unexpected benefits to its time-poor urban residents.

Speaking at the Global Islamic Financing Summit, Dr. Humayon Dar, CEO of Shariah-compliant consultancy BMB Islamic, said Dubai was a much nicer place to live now that the immature infrastructure system was not overwhelmed with construction traffic and armies of property speculators.

Is Dubai real estate downturn reason for sukuk slump?

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This week we had the opportunity to speak with Mohsin Khan, Senior Fellow at the Peterson Institute for International Economics and the former head of the Middle East department at the International Monetary Fund, ahead of the 2009 Reuters Islamic Banking and Finance Summit. I asked him why he thought that the once red-hot market for Islamic bonds had slowed to a trickle. Khan says some of the largest issuers of Islamic bonds, or sukuk, were real estate developers and the reason corporations are reluctant to buy or issue sukuk these days is due in large part to the continuing decline in the value of real estate in Dubai. Click below to listen:
Kahn on sukuk issues from Reuters TV on Vimeo.

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