Tangled up Together...But Indian Real Estate is still in a Class of its Own

Global Markets are so tangled up these days: worldwide shortages of lithium carbonate have created a need for semiconductor chips, and that’s expected to last until at least the end of 2024. So with lithium prices rising from $11,000 a metric ton in 2016 to $37,000 by the end of last year (topping out at $62,000 in between), it’s not good news for the automotive sector. Lithium is a crucial component of EV batteries, which means electric vehicles have gone up in price and down in volume. Everything’s tangled up together…and, of course, the list goes on: since Russia invaded Ukraine last year, global grain and gas prices went up by 27% and 40%, respectively, so UK inflation soared by 9.2% in nine months (even on the most conservative basis), and the UK wasn’t alone…

There is, though, one part of the global economy that’s never been tangled up: and, as you read this, contemplating the cost of living crisis or a million and one other things, you’re either standing on it or sitting on it: we’re talking about terra firma, the earth beneath our feet. Because there’s nothing so regional, nothing so localised, as real estate markets…nothing less tangled up in the sweeping trends of international commerce.

That’s why UK property prices are set to fall by 5% this year (www.property118.com), but half a world away in India, real estate markets have soared by 68% year on year, setting new sales records and firmly embedding the sector at the beating heart of the world’s fastest-growing large economy (www.livemint.com). In the teeth of a worldwide slowdown, vibrant property hotspots from Mumbai to Chennai are bucking the global trend…each rooted deeply in the rich soil of the Subcontinent.

Take the recent decision of India’s Reserve Bank to maintain its repo rate at 6.5% (shadowing a global upwards trend in interest rates)…although that might be expected to place a chill hand on the Subcontinent’s real estate sector, nothing could be further from the truth: the decision exceeds conventional comfort levels, but it certainly won’t dampen resurgent levels of consumer confidence among India’s increasingly wealthy, increasingly urbanised, and increasingly aspirational middle classes. India’s eight leading real estate segments sold more than 2.32 Million units in the first nine months of 2022 alone…and that was during the dog days of the pandemic…so imagine what the future holds. All of them are firmly rooted in the small patch of earth they call home.

There’s nothing tangled up in that thinking…because when it comes to real estate, India is truly in a class of its own.

Executive Overview

Real Estate Markets are unique globally, largely immunised from the chill winds of global economic trends: nowhere is that more true than in India.

Red Ribbon India Real Estate Fund

Red Ribbon India Real Estate Fund is a multi asset class closed-end fund registered in Luxembourg offering investors the opportunity to participate in Growth and Emerging Markets and Mainstream Impact Investments, such as India, that offer returns rarely available in western markets.