Seeing secular shift in real estate; hybrid work culture to continue: Mohnish Pabrai

"I am a bottom-up stock picker and I don't really have market views that one should hang on to. When I find a business that I can understand, and I can figure out its value, I get interested, said Mohnish Pabrai, Managing Partner, Pabrai Funds.

Talking about the real estate space, he said, my interest in the real estate sector in India was really ignited in 2017 right after demonetisation. That actually delivered quite a shock to the sector, it actually collapsed valuations. So, if you were looking at the prices of any real estate company in late 2016, early 2017, they were trading at a fraction of very quick liquidation value.

"Then you had additional things come in like RERA, GST and so the end result of all of these things was that the unorganised developer has been shut out or is on its way out and the game has come to the organised, reputed players," said Pabri, adding that is not so much cyclical but it is more of a secular shift.

The secular shift that real estate has gone through in the last few years - is the movement from the unorganised to the organised. Moreover, COVID has caused permanent changes globally, in terms of how we as humans live, it has changed our habits permanently.

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"One of the things that is a global change due to COVID is a hybrid work environment, which is here to stay – a kind of a mix of working from home and working in the office. The big surprise for most employers was that productivity did not go down when people were working from home,” he said.

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“In India, what has happened is that the ready inventory has been absorbed, and probably the next step in the next year or two, we will start seeing prices move up as well,” he stated.