Taj Mahal: A Sound Real Estate Investment?

Wah Taj! Yes, like millions before me even I uttered this when I first beheld the manmade wonder.  Having been a real estate person for so many years, I had thought that I had seen it all. But on 21^st July 2013, I met the wonder of wonders that is truly a masterpiece, a class beyond compare.

The Taj Mahal is probably the single most popular building in the world and I am sure there is no one who has walked on Mother Earth who is not acquainted with this monument of true love. Folklore says that it took 22 long years to build the Taj and the estimated cost at that time was 32 million rupees. And no labour costs too which would have been preposterously high in today’s scenario. Indeed it is an insane value!

In my view a poor country like India cannot afford such luxuries. Even at the time when the Taj was built, the heavy expenditure made then cannot be supported. According to many like me, it is totally a wasteful way for money to go. In fact it is said that Shah Jahan had drained the coffers of India to build this monument. Showing his love for his dead wife is quite alright but spending the nation’s wealth in such a crazy manner is indeed deplorable. It is believed that his son, Aurangzeb, over threw and held him captive because of his foolish decision.

The rationale behind such a stupendous expenditure is difficult to comprehend. Probably this money could have gone into helping the poor or building the country’s defences at that time. Even an investment in improving agricultural productivity would have proved to be very sound.

I feel that if a democratic government starts building such an irrational piece of extravaganza anti-incumbency would soon come in to play and 22 years of construction would never get over. Not to mention that it would be labelled as one of the worst decisions.

Probably that’s what happened with Shah Jahan.

But hold on! Is the investment as frivolous as we deem it to be? On second thoughts the investment in terms of real estate may not actually be a foolish one. It has been about 400 years since the Taj Mahal came into being and has been unrivalled in beauty and magnificence ever since with no close second. Over these four centuries no one has been able to make anything even remotely as marvellous.

Today Taj Mahal is the icon of India and people from all over the world recognise our country as the place where the most beautiful wonder belongs. This iconic monument draws more than 2 lakh tourists every year from all over the world. During my visit, four busloads of Chinese and Japanese visitors arrived to gaze at the Taj. Just to mention a point here- the entry fee for foreigners is Rs 750 per head.

Ever since the Taj was made, it has attracted tourists. The controversies surrounding the Taj has further increased its value as a ‘must see’ place. It is a splendour that is found in each and every world tourist guide or any list of ‘Places to see before you die’. Recently a poll was held wherein people from across the globe participated to rank the 7 Wonders of the Modern World and unsurprisingly the Taj Mahal outshone the rest (the Giza Pyramids were exempted and included in a separate category).

In terms of revenue from tourism earned by Taj, not only the city of Agra, but the entire country has benefitted with the figures going up each year. There has been no recession or depreciation in the market in this regard. The Muslim countries have been bestowed with the riches of oil, however, they do not have the wherewithal to even plan for such a monument. No matter how much the Muslims hate ‘Hindustan’ this land is the proud possessor of the Taj Mahal.

                 India’s Top 5 Monuments

  

Revenues – Top 5 monuments (Rs crore)
	2011	Change%
Taj Mahal	19.9	15
Agra fort	10.4	-5
Qutub Minar	10.1	13
Humayun's Tomb	6.2	11
Red fort	5.9	6
Source: ASI

All the top ASI monuments listed above are in the “Delhi Circuit” and I am sure that without the Taj Mahal there would be 50% reduction in the “Delhi Circuit” tourists. 

Consider this: If a foreigner spends about Rs. 750/- for entry fee then he stays 1 day in a hotel for not less than Rs. 5,000/-. And of course he spends at the souvenir shops too, carrying home a piece of memory. This way even if we assume the revenues are Rs. 5 crores from entry fees from foreigners then approximately Rs. 33 crores we get additional foreign exchange as tourists spend 1 more day in hotel to see the Taj Mahal.

Looking back it seems it is the best real estate investment that any country could have made. Even Aurangzeb would have agreed with me on this! Shah Jahan’s name is immortal and so is his idea of tagging the wonderful monument as a tribute to his great love for his wife, adding the much needed romanticism that makes any monument famous. Agra is earning a lot due to Taj Mahal. And so is India.

Moral of my visit to the Taj: Investments in real estate - give you good returns over a period of time.