Where the rich are investing 2016

Harkirat Singh

Woodland's Harkirat Singh is reducing his real estate exposure and relying on mutual funds and gold bonds

In a fiercely competitive footwear market, home-grown Woodland has created a niche for itself. With 600 exclusive stores, the privately-held Woodland clocks Rs.1,200 crore in sales — higher than the sub-Rs.900 crore clocked by international footwear giants such as Adidas and Puma. Interestingly, of the 600 stores, a majority of them are owned by the unlisted footwear giant. Hence, it’s no surprise that realty accounts for a meaty chunk of Singh’s wealth.

Singh shares that real estate has been the cornerstone of his family’s investments. And it is largely to do with the fact that Singh, by virtue of being in a consumer-facing business, has over the years seen an appreciation in real estate and, second, it comfortably fits into the company’s business strategy of owning properties instead of relying on rentals.

While Singh has been investing in both commercial and residential projects in the past, of late he is looking more at commercial properties. “We have seen an oversupply in case of residential properties, which results in difficulty during resale,” admits Singh. The flip-around time of three to four years has lengthened in residential following oversupply in the northern market. But, Singh is comfortable waiting 5-10 years in case of a commercial investment. However, over the past two years, Singh has brought down his wealth allocation in real estate to 70%. A sluggish property market has made him rethink his strategy. “Equity mutual funds and bonds were not a priority earlier but that has changed. Return is more or less good in these financial instruments as well,” admits Singh, who allocates 20% of his portfolio towards bonds and equities.

Gold is another asset class that still finds merit with Singh, who swears by the traditional wisdom of buying gold. “It’s a good hedge in bad times,” points out Singh. But instead of physical gold, Singh is investing in gold bonds. 

Singh though makes it clear that bulk of the profit continues to be reinvested in growing the company. But with Woodland’s footprint going beyond Indian shores to the Middle East, Russia, Singapore and HK, Singh knows real estate is something he can’t do without. “It’s business and you can’t do without it,” shrugs Singh.