'Residential segment will remain lucrative'

ASK Property Investment Advisors (ASK PIA), the real estate private equity arm of the ASK group, recently closed its sixth fund at ₹1,500 crore, with an aim to focus on debt funding opportunities in the residential property segment.

- Priyal Mahttai

The fund house is largely focused on mid-market and affordable housing segments that are most affected by changes in interest rates. However, Amit Bhagat, chief executive and managing director at the real estate fund, believes that despite the increase in interest rates over the past year, demand for residential real estate is likely to be unaffected. This is because end users, and not investors, are driving demand, he said.

In an interview, Bhagat also said the transformational changes in the real estate sector, including the establishment of the Real Estate Regulatory Authority (Rera), should help the housing segment get the attention of foreign institutional investors who have so far been mostly focusing on commercial, logistics, or retail real estate segments. Edited excerpts:

Since ASK Property Fund has predominantly been in the residential sector as an investor, has the risk-reward changed over time?

As a debt player, from 2017, the risk-reward has been commensurate. One, because the debt availability reduced in 2018, to 2021. It has been a counter-cyclical opportunity.