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The 'Warren Buffett' of Real Estate is Betting Big on India. Should You?

Jan 22, 2018

Rahul Shah, Editor, Smart Contrarian

Champion investors bet big when the dice is loaded in their favour. And why not? If it's raining gold, you should hold out a bucket, not a thimble.

Warren Buffett, apparently, always keeps a bucket handy just in case it starts raining gold. The crisis of 2008 being a perfect case in point.

However, he was not the only smart bloke in town going around picking up stocks on the cheap.

There was another sharp investor using the exact same playbook; just for an entirely different asset class.

In 2008, Blackstone, the world's largest asset management company, was quietly investing billions of dollars buying tens of thousands of single family homes.

To give you an idea of how big this is, the private equity giant has the single largest private portfolio of single family homes in the country.

Their rationale for buying up homes wasn't very different from Buffett's. Be fearful when others are greedy and greedy when others are fearful.

Blackstone walked the talk and how. When the entire country was fearful about US real estate, the firm saw a once-in-a-lifetime opportunity and readily put out the bucket.

To say that the bet has paid off handsomely would be stating the obvious. It created a US$ 12 bn single- family rental behemoth with more than 80,000 homes across the country.

Blackstone's Next Big Bet

Guess which country Blackstone's real estate arm is most bullish about right now?

It's none other than India.

Turns out, Blackstone is the biggest owner of office space in India, with about 100 million square feet. For perspective, this is the same as owning 10 commercial complexes the size of Bandra Kurla complex, or over 600 Wankhede stadia.

Why is Blackstone so bullish on India? Why does it own two times the office space here than it does in China? Simply because it knows the kind of growth that's possible here over the long term.

60% of the India's population still lives in villages. And when this population moves out of villages and migrates to cities for jobs and homes, real estate demand is going to take off big time.

For anyone willing to look beyond the near-term disruptions like RERA, GST and demonetisation, there is tremendous money to be made in real estate investments over the long term.

In fact, the recent bout of correction in the sector provides a fantastic entry point, somewhat akin to what Blackstone got in the US.

But how do you go about investing in this asset class? The real estate sector is famously tricky. How do you figure out what type of real estate should you invest in and where exactly should you invest and at what price?

The Real Estate Guru You Should Listen To

Well, my beat is stocks. I help you with stock specific analysis and valuations. However, real estate is a different ball game altogether.

I have no particularly big insights to share with you on real estate; like you I need to get my advice elsewhere.

The man I listen to has been investing in real estate for over two decades, making countless investments, earning crores of profit for their clients. He is someone who was handpicked by our founder, Ajit Dayal, to found a real estate fund for wealthy foreigners.

So, wouldn't it be nice if we invited this man over and have him share his views on the most attractive real estate deals and locations out there?

Wouldn't it be great if you get to pick this man's brains on what to look for when buying real estate and what type of real estate investment is best suited for one's needs?

Well, we are inviting him to the Equitymaster Conference next month to speak. Better yet, he is hosting a free webinar sharing his real estate secrets with viewers. (you can sign up here).

Well, you are very close to seeing your real estate dreams turn into a reality. All you need is the right guidance.

Happy Investing,

rahul Shah
Rahul Shah (Research Analyst)
Editor, Smart Contrarian

PS: Rahul Shah spoke above of a webinar by a real estate expert. It's my job to tell you this webinar is free and goes live on January 30th at 1 pm. Reserve a spot now by clicking here

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1 Responses to "The 'Warren Buffett' of Real Estate is Betting Big on India. Should You?"


Jan 25, 2018

i am appreciated to your blog, articles very good

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