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Apollo Global Management Inc.’s partner for real estate in India, Nipun Sahni, is leaving the firm, according to people familiar with the matter.

Sahni, who joined Apollo in 2015 and is responsible for investments in India, is departing amid a shift in Apollo’s property strategy in the region, said the people, who declined to be identified because the information is private. Apollo began winding down its Asia real estate equity fund last year, but said it planned to continue its involvement in real estate debt and special situations in the region. 

Arpito Mukerji, a managing director in Apollo’s real estate group responsible for sourcing and overseeing real estate investments in India, is also leaving the firm, one of the people said.

A representative for Apollo declined to comment. Sahni and Mukerji didn’t immediately respond to requests for comment. 

Sahni will continue to serve as an adviser to Apollo for a year, the people said. The real estate team in India will continue to report to Steven McElwain, partner for real estate at Apollo, they said. 

Apollo had put about $1 billion of private credit into 10 transactions involving developers in India in the past two and half years, Sahni told Bloomberg News in November. The country is a hotspot for private credit because rules restrict bank lending to the sector and India’s rapid urbanization has caused an affordable housing shortage.

Apollo, Ares Lead Private Credit Push Into India Property (2)

The firm will continue to deploy credit capital into real estate deals in India, the people familiar said. Apollo plans to write larger checks of between $200 million and $250 million instead of the $50 million to $100 million deals it was doing before, they said. 

India’s real estate market has been attracting other global investors, with Blackstone Inc. and Brookfield Asset Management benefiting from large multinational companies and banks setting up their back offices in India.

(Updates with additional departure in third paragraph.)

©2024 Bloomberg L.P.

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While the start of 2024 has seen a soft real estate market, the BC Real Estate Association (BCREA) believes home sales will pick up by the end of the year.

In its latest economic outlook, released Thursday morning, the BCREA says all eyes are on the Bank of Canada’s interest rates, and when the country will begin to see those drop.

“It appears that buyer confidence is hinging on seeing the Bank of Canada lower its policy rate returning to the market. BC home sales are tracking at a 65,000 unit annual rate through the first quarter of this year, essentially the same languid pace as the first quarter of last year,” the BCREA said.

“This is even though Canadian five-year fixed mortgage rates have already plummeted to start the year, falling from over 6 per cent in late 2023 to 5.09 per cent in the first quarter,” the association added.

“Therefore, the biggest question for the provincial housing market is when the Bank of Canada will lower its policy rate and by how much. The answer to that question depends on how the Canadian economy and, crucially, Canadian inflation will evolve in the coming months.”

The BCREA says the Lower Mainland tends to be “the engine room” of the province’s economy, balancing out the rest of B.C.’s “underperformance.”

It notes that deteriorating affordability in Greater Vancouver will remain a significant concern, however, it does expect sales to pick up later this year.

“A combination of falling fixed mortgage rates and strong population growth is forecast to drive sales higher this year and next. After a very slow 2023, we forecast sales in Greater Vancouver will rise 7.3 per cent this year, while the Fraser Valley will see sales rise 7.4 per cent, and Chilliwack sales are expected to increase 8.1 per cent.”

The BCREA says it expects price growth in the region to “mute” as listings are expected to normalize this year after a 20-year low in 2023.

All markets in the Lower Mainland should see a one to two per cent increase, the BCREA says.

“However, the full impact of falling interest rates and a recovering economy is expected to buoy prices in the more affordable areas of the Lower Mainland in 2025, with prices rising 4 per cent or more in Chilliwack and the Fraser Valley.”

The BCREA says it believes the BoC will begin to lower interest rates in June, as the economy signals “weak economic growth, a slowing labour market, and a downward trend in inflation.”

“We continue to forecast that the Bank will cut its policy rate starting in June, with as much as 100 basis points of cuts by the end of 2024. As a result, we expect home sales to pick up in the second half of the year ultimately rising 6.9 per cent over last year and heading into 2025 with strong momentum.”

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Drew and Jonathan Scott of HGTV’s new series “Backed by the Bros” — also known as the Property Brothers — spoke with Quartz for the latest installment of our “What’s Next for…?” video series.

Watch the interview above and check out the transcript below. The transcript of this conversation has been lightly edited for length and clarity.

ANDY MILLS (AM): Interest rates are now above 7%. What effect is this having on the work you guys are doing and what do you see is next in the real estate industry?

DREW SCOTT (DS): A lot of crying. That’s what’s happening. Even the tough thing is anybody who’s looking to, you know, refi or anybody who’s looking to pull equity out of their home, it’s a tough time because you’re not getting what you wanted with the high rates. Granted, it looks like things are coming down a little bit, but this has been forcing people to try and find other ways to create more opportunity to get access to money like converting a garage into an ADU, having a renter in there. A lot of people are becoming landlords for the first time in their lives

JONATHAN SCOTT (JS): And in reality there’s still a huge opportunity for people if they’re looking to invest. They’re looking to, you know, pull a little bit of money out. 7% is not bad. It’s not great, but it’s not bad. But it is sort of at that tipping point where you want to be a little more cautious with what you’re putting your money toward and how much money, how much leveraging you’re doing. And so that’s what we say. There’s opportunity to do well. There’s opportunity to make money in real estate. You just have to be careful.

DS: I just cry for those people who had locked in at like 3% and now they’re coming back out and they’re like, oh God, it’s over doubling right now. But you know, c’est la vie, you just gotta be careful with real estate.

Read more: Mortgage rates are rising again as inflation fears mount

AM: Yeah. So for the folks that bought at 3%, they’re saying that they’re not selling. How will this or how is this affecting them?

DS: Well, that’s the thing. The people that can’t afford a seven or 8% interest rate, they’re gonna have to sell if they can’t afford it. Because you can’t just be like, ‘No, my term is up and I refuse to get a higher interest rate loan.’ You have to finance somehow, unless you have cash to-

JS: Or a money tree in your backyard.

DS: A money tree in your backyard. Yeah.

JS: We saw that happen back in 2008. We saw that happen. There are some people who just over-leverage and they don’t realize that this is when it becomes a problem when your mortgage is up for real and your rate is going up. And so you have to always give yourself that little bit of a pad to make sure that you’re covered.

DS: That’s what our whole new show Backed by the Bros, it’s all about this. It’s all about people who have wanted to try and get into real estate a little bit more. They want to invest, they want to try and provide more for their family. And they get in over their heads because they thought real estate investment is pretty straightforward. ‘I watched it on HGTV, I can do it.’ And so they jump in and all of a sudden they’re over leveraged and they need help to get out.

JS: One of the clients put a hundred grand on their credit card so that they could service the debt they needed to for this property. And we’re like, at what rate? And it was like insane double digits. I’m like, you’re, you are gonna lose everything. And literally it was one of the couples, they had already spent their kids’ college fund their own personal savings. They were totally beeped. Yeah. And so we had to come in and we really, we put our reputation on the line. We use all our resources and we get the project done so they can start having that money come back in.

AM: Yeah. Backed by the Bros on HGTV June 5th.

JS: Oh, wow. Yes. You’ve done research.

DS: You know that off the top of your head. June 5th, 9:00 PM HGTV. But it’s fun for us just to find different ways to inspire people. And I love that people want to get into real estate. I love that people want to try and create more opportunities for themselves. And I also like the idea, you know, with the housing crisis that if you’re looking, whatever city you’re in, there are usually incentives that are helping people get into additional revenue through an ADU through an auxiliary dwelling unit. Having tenants, it’s a great way to sort of offset the crisis as well as help people earn more money.

JS: And there’s a way to have a hell of a lot of fun while you’re doing it. We’re not in this business to use complicated design terms and just bore people that, look, we wanna have fun. We wanna show people that you can really find passion in real estate, but you also have to make sure you’re being smart.

DS: Wait, is ADU a complicated design term?

JS: Yeah. Marginal.

AM: What’s that mean?

DS: It’s like a rental suite if you have like an auxiliary dwelling unit.

AM: Oh yeah.

DS: But it’s a fancy way of saying having a renter turn your garage into something you can rent out.

AM: Gotcha. You guys are seeing people turn in their garages into apartments?

JS: There’s a huge housing crisis all across the country, particularly in the major metropolis cities. And so I do believe that the solution beside finding ways to build new projects, multi-family projects and affordable housing, converting your ADUs, so people putting in basement rental units, people putting in garage conversions, building above their garage for a rental unit. All of these things are incredibly helpful when it comes to solving the housing crisis. And you also like a lot of people, ‘cause real estate is so expensive today, especially in places like New York and Los Angeles, imagine having that additional income coming in for you, how it can offset your costs, your bills, your taxes, everything. It’s pretty incredible.

AM: In Backed by the Bros, you guys are looking at a lot of troubled investments. So you mentioned credit cards being one of the mistakes you can make. What’s another mistake you guys are seeing over and over again?

DS: Well, we constantly, with a lot of the different episodes that we have of different families and investors that we worked with, they’re jumping in before they have any sort of a plan. One homeowner bought all of the appliances and cabinets and everything she could use for a project before she even had the house and knew what she was doing with it. So in the end, she had stuff that was not ideal and she just tried to make it work. Well, you’re not gonna get your optimal rent if you have a suboptimal place for somebody to rent.

JS: Also, whenever I hear somebody say, I’m gonna run my own construction project, I’ll GC myself instantly, I’m like, red flag. Yeah. Because if you have never GC’d before, you have no clue what you’re doing. And as soon as one of your subs falls out, everything slows down, comes to a crashing halt. And so you got, you gotta be realistic. Hire professionals to come in. You’re gonna pay a little bit more for some of this stuff, but it’s worth it in the end because you will save money.

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