'Foreign capital only if realty firms are honest'

PASSING THROUGH/ Dr Corvan Zadelhoff

Dr Corvan Zadelhoff

Dr Cor van Zadelhoff is no stranger to India and comes here for both work and pleasure. A pioneer in the European real estate business, he has friends among the Indian royal families through the polo circuit.

Brand ambassador for the global real estate adviser DTZ, 68-year-old Zadelhoff is also on the boards of several European firms with specific business interests in India.

He finds India has tremendous scope for foreign investment in the real estate sector. "The Indian economy is growing at a healthy rate. A lot of western companies will continue to offshore their work to various Indian cities. The potential for real estate is visible."

But the key to hitting it big for real estate firms is honesty and transparency.

"Nearly five dollars are chasing every dollar of real estate product. Eight to 10 dollars are chasing every dollar of a real estate asset. So much capital is on the move. A local partner with knowledge combines well with foreign capital. The Indian real estate firms have no choice other than displaying transparency and honesty to attract foreign capital," he points out.

The flow of foreign capital can be unending, Zadelhoff feels, if the Indian real estate firms latch on to corporate governance standards.

Zadelhoff is not merely appalled by the "oversupply" in the real estate market, but is shocked with the quality of construction. "This tendency has to be stopped. The quick growth of the real estate market has led to poor construction," he says.

He intends to cash in on this "poor quality" and "over supplied" market to propel DTZ India's growth. "Poor quality of construction means few takers. So the options are limited. This is where we step in to ensure a quality product," Zandelhoff says.

Zadelhoff founded his organisation in 1968. In 1990, an international joint venture was created between five European commercial real estate agencies to form DTZ (Debenham Thorpe Zadelhoff). It has expanded its network to 42 countries. Zadelhoff is also the CEO of his private investment group, which holds real estate valued at approximately Euro 30 million.

In the last two years, the Indian arm of DTZ has grown to a staff strength of 150. In the last six months, the firm has facilitated major firms like Google, SAP Labs, AOL and Aviva in moving to new campuses.

"The intention is to take the staff strength of DTZ India to 1,000 over the next 10 years. At least 35 cities are under the scanner for expansion," notes Zadelhoff. But that number pales in comparison to China where 4,000 of DTZ's total staff strength of 10,500 are employed.

"Nearly 40 per cent of our employees are in China. But definitely India is a growing market where we see strong potential for us to make a mark. We are ready to bring in our clients provided the standards are met," concludes Zadelhoff.