New Delhi, July 02, 2019:
- How is real estate market positioned currently?
After the recent election results with a solid mandate from the people of India, the scenario looks stable, promising and is definitely very conducive to businesses at large as the market isstabilizing. As such the environment is quite promising for real estate. India’s economy is growing at a steady pace and job creation is also picking up. Commercial realty is doing phenomenally well. All aspects of the sector – residential, retail, office and investments, have seen a healthy increase in demand. The revival of fortunes on the residential segment is due to improvement in buyers’ confidence due to implementation of RERA (Real Estate Regulation Act) in most states and steady principal values that have begun to show a rising trend. In view of the implementation of RERA in full swing and also the GST roll-out, the construction industry is set to see greater stability and a positive upswing. These two aspects have hard-pressed many fence sitters and first-hand home buyers to take purchase decisions, which is leading to more demand in residential segment.
- Insights on any particular market that is doing really well?
Hyderabad market is doing well and in fact, it is one of our focus markets along with Bengaluru. Both cities have a good migrant population and investor confidence is high. The start-ups, new offices of global offices of global MNCs and investors are attracting talent in both Bengaluru and Hyderabad and both cites look very promising for investments. Bengaluru however can be more proactive in terms of infrastructure. Metro rail, expressways, road widening, and flyovers are the need of the hour in both cities and this can really give the real estate industry the much needed impetus.
- What are some ongoing projects that are likely to impact real estate in Bengaluru?
In the current market, commercial real estate, especially ‘Grade A’ office properties is definitely the best-performing real estate asset class. Thanks to the incumbent government’s proactive initiatives such as ‘Make in India’ and the thriving start-up culture in the country, demand and absorption for well-located office properties has been high with rental yield going consistently going up. We expect the residential market to perform better in the next two months as due to the strong demand for commercial spaces, residential is bound to grow alongside to complement this growth.
- How do you expect the second half of 2019 to be? What are your upcoming projects?
Demand for ‘Affordable Housing’ is expected to continue. It is the need of the hour and you can see many developers who were in the luxury or high-end segment, making their foray into affordable homes. We are happy to have made our foray with Park Cubix, our flagship affordable homes in a futuristic location, Devanahalli. In addition, we are also working on few key projects in Hyderabad. Currently, we are working on approximately 28 million sq. ft. in Hyderabad. We have also tied up with the Telangana Government to build Image Tower, a world-class animation, gaming and visual effects centerof more than 2 million sq. ft. Salarpuria Sattva Knowledge City in Hyderabad will comprise of 7 million sq.ft. and is an IGBC certified, Platinum-rated green building, touted to be the best in Asia. Salarpuria Sattva Knowledge Park comprising 3.2 million sq. ft. is under construction and will be ready in three years’ time. Other projects include Salarpuria Sattva Knowledge Capital in the Financial District of Nanakramguda. In Bangalore we are putting up about 8 million sq.ft. of commercial spaces. Among these are Knowledge Point which will be ready by the first quarter of 2022, Knowledge Court, ready by quarter two of 2020 and Salarpuria Sattva South Gate, ready by the first quarter of 2020. In Pune we have Salarpuria Sattva Tech Point which will be ready by the second quarter of 2020.
- Do you see any change or impact on buying post demonetization / GST / RERA?
RERA and other pertinent policy reforms have opened several new avenues for growth in the Indian real estate sector, by boosting the confidence of institutional private equity investors. In fact, Indian real estate’s attractiveness to institutional investors is growing multi-fold. Private equity inflows into Indian real estate rose by almost 15 per cent over last year’s.In other words, the country’s real estate market is maturing and it is not just primary sales, which are becoming more transparent as a result.
The demonetization move was received with a lot of panic, causing people to be wary of spending, leading to a decline in demand for housing. Property registrations saw a decrease of up to 40%, giving rise to an air of fear among developers. This led to them putting many projects on hold, to avert losses and risk. While the effects of demonetization on the real estate sector have varied from place to place,with time,the demand for housing saw a gradual increase, especially in the affordable housing segment, a large chunk of which is comprised of small-sized flats. Affordable housing is being given a healthy push by the government and there are also a few tax benefits that have been introduced. On the other hand, the real estate sector is set to greatly benefit from RERA. It will go a long way in increasing buyers’ trust in the sector and will serve to encourage foreign investment as well. RERA has brought forth a number of other changes which will transform the face of Real Estate in India. In addition, GST is still in its initial stages and there are many processes that are yet to be streamlined. However, with all the uncertainty around GST, the reformation of the complex tax structure stands to bring increased transparency to the real estate sector and boost foreign investments.
The economy is still in a transitory stage when it comes to RERA and GST and there are many developments that will happen over time as the new regulations get further streamlined. Industry veterans hold a positive stance towards these changes and expect to see tremendous long term benefits out of them.
- Do you have any acquisitions and expansion plans in the pipeline?
A lot of projects are under construction. In Bengaluru we are putting up commercial spaces comprising of 8 million sq. ft.; as well as investing in 3 plotted development projects. In Hyderabad we are putting up 16 million sq. feet of commercial spaces. We are also in discussions for a large residential project in Hyderabad.
Corporate Comm India (CCI Newswire)
