India’s estimated gross domestic product (GDP) growth and rise in per capita income are expected to fuel a boom for real estate in the country–both across residential and commercial segments. Though the current supply-demand situation in the residential market looks grim, there are green shoots of a revival, according to international property consulting firm, CBRE, ranked 207 on the Fortune 500 list.

In an interview with Fortune India, Steven Swerdlow, chief executive officer, Asia Pacific, CBRE, and Anshuman Magazine, chairman, India and South Asia, CBRE, say that India was CBRE’s fastest growing market in the world and was likely to overtake other large real estate markets in the Asia-Pacific region such as Japan and Australia in the next five years.

Swerdlow and Magazine also spoke of the imminent spurt in capital inflows into Indian real estate as the sector becomes more transparent and the unique proposition that co-working spaces present to organizations like theirs—both as clients and competitors.

Edited excerpts:

How big is the Indian real estate market for CBRE, compared to other regions in the Asia-Pacific that you look after?

Swerdlow: Asia-Pacific as a region is the fastest growing market for CBRE globally. Traditionally our largest businesses in this region have been in Japan and Australia. Our fastest growing business in this region and in the world now is India, which we set up in 1994. I expect India will eclipse both Japan and Australia, in size in the next five years.

More than half of our business in India comes from large multinational corporations outsourcing professional services related to buying, leasing or building commercial spaces in India. Not only do we secure transactions for them, but also do project management and manage the spaces for them once they are occupied.

Magazine: One thing that has changed for us in India is that apart from working with the MNCs we are also now working with many domestic companies that are expanding operations and looking at taking up more commercial space.

But the residential market in India has been struggling for a few years now. When do you expect that to turn around?

Magazine: It is true that the Indian residential market has been struggling but we are seeing the market showing signs of growth this year (2018), for the first time in five years. That doesn’t mean that prices have gone up (since a revival in residential real estate is almost always synonymous with firmer prices), but sales have picked up. Part of the reason for this is the promotional, financial subvention schemes offered by developers, which make these properties more affordable for buyers. Then there is also strong demand from end-users, who are more confident of coming into the real estate market due to regulations such as the Real Estate (Regulation and Development) Act (RERA) making it more transparent. The third reason is that many more projects are being launched at lower price points across the country, which makes it relatively more affordable. So India’s residential market should do better than last year.

What is your view on the foreign capital inflow into the Indian real estate sector and how is global investor interest in Indian real estate likely to shape up in the days to come?

Swerdlow: The entire Asia-Pacific region, along with India, is attracting a lot of global capital in real estate. You can see that here (in India) with global investors such as Blackstone, Brookfield and GIC having made substantial investments. People are increasingly seeing Indian real estate as a safe bet to invest in; as a market where one can invest and get a decent exit subsequently. Earlier, you could invest, but investors didn’t know where the exit would come from.

Magazine: As the Indian real estate sector becomes more transparent, India may get as much capital inflows as Japan and Australia. Blackstone is now the largest office landlord in the country and interest evinces by such global marquee investors has opened the doors to India for other investors. Good exits are also possible now due to Indian institutional investors also looking to invest into real estate. Also, whenever REITs (Real Estate Investment Trusts) become a reality in India, it can be a game changer if the first few to be launched meet with success.

Co-working spaces have become a big player in the commercial real estate market in India. Some of them are also looking to undertake facilities management services at the offices of large companies, which is something firms like CBRE also does. How do you plan to deal with such competition?

Swerdlow: Co-working spaces are fueling a boom in commercial real estate everywhere. But the space they are taking up is still a small percentage of the overall commercial real estate market. They are clients of ours and we help some of them find spaces in markets like India and elsewhere. They are also competitors of ours at the same time and they are talking to some of our clients, for whom we manage spaces, to also manage a small portion of their space. They are doing this on an experimental basis. It is a good wake-up call for us and we now have a lot more aggression with which we are approaching the competition from these co-working spaces. We will do everything that will help enhance client experience and use app-based technology for this as well.

Magazine: We not only help co-working spaces acquire leased office spaces but also help fill those spaces by connecting them with companies that need such office space for their needs. We also do fit-outs for them as a part of our project management business, and in some cases also manage their facilities. There is a little competition from them, but that helps us be on our toes. For us, co-working spaces are more of an opportunity than a competition.

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