As the pandemic eases, Apollo Global Management Inc is moving ahead with its plans to lend nearly $1 billion to residential property developers in India this year. Reportedly, last year, Apollo had lent nearly $750 million to Indian developers with two-thirds of the sum directed to residential projects. That said, nearly 70 per cent of this year’s lending is expected to go to home builders, while the remaining 30 per cent is directed toward commercial developers. A report by SURFACES REPORTER (SR).
Residential market bouncing back
The market is getting back on track and matching the figures of the pre-COVID level. Additionally, some markets are showing better figures than 2019. Reportedly, ‘it is consolidating rapidly with the number of unsold homes in India that stand at a 10-year low which shows prices have an uptick.’ The low-interest rates and discounts by developers have given the market the necessary boost. In the residential property market, Crisil Ratings’ report suggests that low inventory levels are expected to sustain the boom where prices could rise as much as 10 per cent across India’s top six cities. The office property market, on the other hand, is benefiting from more hiring in startups, an increasing number of initial public offerings and the expansion of the IT industry.
Apollo's plan of action
Opened in 2008 in Mumbai, Apollo at present manages nearly $513 billion of assets worldwide and started lending to Indian property developers in 2017. Last year, when shadow banks such as IL&FS Investment Managers Ltd and Dewan Housing Finance Corp got in trouble that further led to dislocation in the local credit market, Apollo stepped in and increased its lending activity. Even during the pandemic, when the financing demands started to rise, the business took off. Reportedly, Apollo’s average loan size is expected to be between $40 million-$60 million.
However, the war in Ukraine and supply chain troubles could potentially affect the Indian property market. The rise in commodity prices and building materials with pent-up demand for houses is further affecting the real estate prices in the country. Post COVID, people have realised that houses are not just a roof over their heads but an important part of their lives, which is why affordable, premium and luxury housing are doing well. Going forward, in the coming year or two, experts suggest that the residential real estate will be observing the best time.
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