Budget 2015 may bring some clarity on REIT: Arvind Sanger, Geosphere Capital Management

In a chat with ET Now, Arvind Sanger, Managing Partner, Geosphere Capital Management, shares his views on real estate sector. Excerpts:

ET Now: Real estate/infra seems to be a pocket that everybody is now starting to bet on not something that has turn up too dramatically but something that may have a good next 12 to 24 months, is that a space that you would be watching out for?

Arvind Sanger: It is a space we do not have active investments there right now but we are looking at it closely. There are two particular things to look out for, one is that the REIT that came in the last budget was not well crafted and there is some hope and expectation that in the upcoming budget there will be more clarity on REITs and if that happens then companies, which have a large enough presence in commercial and are candidates for REITs, would be big beneficiaries in terms of the valuation unlocking on that side of the business.

The other catalyst is clearly in interest rate cycle which is benign and which is going to be turning positive, real estate is clearly going to be beneficiary from falling interest rates and if the liquidity eases for some of the developers as well as demand improves as mortgages rates come down and economy recovers, it should also help demand.