Jayesh Gandhi positive on residential real estate space

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Jayesh Gandhi , Morgan Stanley Invst Mgmt is positive on residential real estate space.

Gandhi told CNBC-TV18, "From a macro perspective we like real estate quite a bit infact I would say I am fairly bullish on the medium-term to long-term view on residential real estate. We think the pent-up demand for quality housing in the mid-income, high-income category over the next three-five years or ten years is very strong and also if you see the credit availability in the sector particularly for mortgages is very good."

He further added, "Every institution in this country would want to lend in the housing sector. So that is a macro view, which is very bullish unfortunately when you look at the bottoms of microview and look at companies, there is fair amount of disappointment because companies still not generating cash flows they talk about land bank and pretty much use their capital and their resources to acquire land banks with very little execution on the ground. So to complete that we look for companies that are executing, selling and on a monthly or on a quarterly basis are doing volumes, keeping the price point or the prices flat or constant and looking at volume growth."

"In that space we have found only two names, which we have added in the portfolio. Sobha is the one and Phoenix Mills is the other one, which we have bought probably 12-18 months ago. I think the macro story in real estate is very strong and will continue to remain strong but the micro is yet to catch up and I think that is where the disappointment is but we are still watching many of these companies very closely."