It is obvious that his roots are Down Under. "The Indian realty market is like a mug of frothy beer. Just as a good frothy beer has lots of bubbles, every real estate market too should have lots of bubbles," says Michael Thompson, group CEO (Asia-Pacific) of the Shanghai-based real estate consultancy Cushman & Wakefield. And he isn't talking through his hat. Thompson spent eight years here, spread over two stints. He first came to India in 1994 as the CEO of real estate consulting firm Colliers Jardine. In 1998, he crossed floors to Cushman & Wakefield India as its managing director. Three years ago, he relocated to Shanghai as the CEO.
Thompson says he packed his bags to leave India with great reluctance.
He is a veteran of almost three decades in the real estate business. After obtaining a degree in urban estate management from the University of Wales in 1975, Thompson signed up with Martin & Stratford, a UK-based firm of chartered surveyors. He joined Jones Long Wootton in 1982. Nine years later, he joined Colliers Jardine as its managing director for Western Australia. This marked the start of his relation with India.
On a visit to India to take stock of the Cushman & Wakefield offices in Delhi, Mumbai and Bangalore, the 47-year-old Thompson talks of his love for the country.
He has walked through the crowded markets of Delhi, has developed a fondness for Punjabi and Gujarati cuisine, keeps close tabs on the twists and turns of Indian politics and is very familiar with the country's chaotic and often unpredictable real estate market.
With the real estate market heating up, is it a bubble waiting to burst? "About 80 per cent of the investments is genuine and is routed to township and residential area development. And the hike in prices is definitely in line with the economic activity of the country and increase in income," says Thompson,
Still, his advice to investors is to stay away from all markets where prices have breached the Rs 2,500 per sq foot mark.
"A residential real estate market above Rs 2,500 is unjustified in India and specifically if it is in the suburbs. These prices could be acceptable in the next 4-5 years, but as of now such markets are a strict no-no," he cautions.
Thompson expects a correction in spiralling realty prices in the country sooner than later.
"The realty market has developed an in-built mechanism to maintain equilibrium. The prices will move to parity and the upswing cannot go on endlessly. Limited supply coupled with increased affordability is what has led to a price hike and more supply will check prices," he says.
He is not unduly worried. That's because, according to Thompson, the real estate boom that all of us are talking about is not as strong as in places like China, Singapore, Hong Kong or Moscow.
"Even after keeping the conditions like per capita income and density of population in mind, prices in Indian cities are not alarmingly high," he says. So could prices spiral further? Thompson claims that there is enough reason to believe that.
Despite this, within the Asia-Pacific region, Thompson is very bullish on India, expecting it to be the next big growth story.
And his favourite realty market? Delhi. "Hong Kong, Shanghai and Singapore have had their share of growth. But India is witnessing a vibrant market, and with fund managers now looking at properties, it will become more exciting and some models can be replicated in other Asian countries," he says.
And this is precisely the reason why Thompson is believed to be interviewing staff in India to place them overseas. "The business process outsourcing (BPO) and financial services sectors have made good headway in India and we can use the expertise to develop strategies in the Chinese markets," he says.
But what's exciting for him is the real estate growth in other Indian cities. Thompson admits that he is yet to understand the property market in cities like Hyderabad, Chennai, Kolkata and cities like Pune and Jaipur.
"It is exciting to see the kind of commercial property growth which the smaller cities in India are seeing on account of the BPO and services sector boom. This is definitely more real and palpable," he says.
