Crucial months for realty sector
Infrastructure a key challenge to the growth of sustainable Indian real estate sector
``To transform the Indian real estate sector into the best paradigm in the world is vision 20-20``, said Anuj Puri, conference chairman & chairman and country head, Jones Lang LaSalle Meghraj at the conference on Indian Real Estate 20-20 organised by the Confederation of Indian Industry (CII) in Mumbai today. Puri laid down the issues impacting the growth of the Indian real estate sector and the need to focus on those challenges to move ahead. He emphasized on the need to recognize and address following issues:
Demand & Supply: With rising interest rates and inflation, residential real estate demand remains. However the need is to anticipate the needs of the end users and match demand with supply.
Liquidity: Though liquidity was not an issue earlier, a balance between risk and return is gaining importance and therefore look at innovative financial structures becomes important.
Market Performance: Stock markets and real estate markets being interlinked, market performance is critical.
Infrastructure: Indian leading cities are strained for infrastructure. With the infrastructure gap ever widening, it remains an important challenge.
Talent: Skilled manpower and training is a definite requirement.
Sustainability: Changes at the levels of developers, occupiers, funders and regulators is called for.
In his keynote address at the CII Programme, Jamshyd N Godrej, past president, CII & chairman & managing director, Godrej & Boyce Mfg dwelled on the importance of sustainable development and environment friendly real estate development.
``Green buildings are not only socially important but also economically``, said Godrej. He emphasized that cities can be sustainable in case there is holistic growth.
``The need is that industry consisting of developers, architects, funders and the Government should come together to formulate a sustainable ideal policy``, stressed Godrej. He made good his point by instance of the centre of excellence in Hyderabad called `Green Business Centre` which has been world`s first green building and which has succeeded in conserving energy much beyond projections.
This was followed by a panel discussion consisting of eminent panelists who discussed and debated on the challenges posed by infrastructure and whether the Indian real estate sector was sufficiently geared up to meet them. They agreed that development would happen only where there is adequate support of infrastructure.
Discussing on how to improve infrastructure links with real estate, Hemant Joshi, managing director & CEO CRISIL Risk and Infrastructure Solutions, stressed that with proper infrastructure township policies of the government can succeed and this would also lead to realistic fall in real estate prices. ``An increase in spending on infrastructure from the current 5% to 9% is critical``, said Anish Nanavaty, principal, IDFC.
``Innovative concepts in terms of real estate development in the peripheral areas, alternative funding and power trading can be regarded as some of the factors necessary to ensure the sector`s growth``, expressed Mayur Shah, director Marathon Realty. Supporting his views was Anuj Puri who stressed that over the next decade large economic activity would start in the tier II & III cities and the market forces would push the real estate growth.
Representing the Mumbai Rail Vikas Corporation was its managing director P C Sehgal, who highlighted the problems of increasing population migrating towards the periphery of the cities without adequate transport support. He called upon the industry to come together and support state railways in implementing their projects by part funding.
``Where the corporate sector has successfully entered health and education sectors, public private partnerships for building infrastructure should be given priority``, emphasized Pradeep Bhargava, chairman CII Maharashtra State Council and managing director, Cummins Generator Technologies.
Panel discussion on growing trends of the real estate sector in Tier II & III cities saw industry players and participants exchanging ideas on the opportunities and risks associated with development of these cities. ``Opportunities are abundant, what is required is an attitude change``, proclaimed Ashish Raheja, managing director, K Raheja Universal.
The panelists agreed that key drivers to development of tier II & III cities were industrialization, type of industry and education. ``Affordability and pricing are important in tier II & III cities``, said Rajeev Piramal, executive vice chairman, Peninsula Land.
Talking about the role of political support and leadership in tier II & III cities, Sagar Sheth, director Sheth Builders expressed that without the support of the political system, growth would certainly be very difficult. The forum agreed that smaller cities need more nurturing and with the right kind of policies and system vision 20-20 could be achieved.
``To transform the Indian real estate sector into the best paradigm in the world is vision 20-20``, said Anuj Puri, conference chairman & chairman and country head, Jones Lang LaSalle Meghraj at the conference on Indian Real Estate 20-20 organised by the Confederation of Indian Industry (CII) in Mumbai today. Puri laid down the issues impacting the growth of the Indian real estate sector and the need to focus on those challenges to move ahead. He emphasized on the need to recognize and address following issues:
Demand & Supply: With rising interest rates and inflation, residential real estate demand remains. However the need is to anticipate the needs of the end users and match demand with supply.
Liquidity: Though liquidity was not an issue earlier, a balance between risk and return is gaining importance and therefore look at innovative financial structures becomes important.
Market Performance: Stock markets and real estate markets being interlinked, market performance is critical.
Infrastructure: Indian leading cities are strained for infrastructure. With the infrastructure gap ever widening, it remains an important challenge.
Talent: Skilled manpower and training is a definite requirement.
Sustainability: Changes at the levels of developers, occupiers, funders and regulators is called for.
In his keynote address at the CII Programme, Jamshyd N Godrej, past president, CII & chairman & managing director, Godrej & Boyce Mfg dwelled on the importance of sustainable development and environment friendly real estate development.
``Green buildings are not only socially important but also economically``, said Godrej. He emphasized that cities can be sustainable in case there is holistic growth.
``The need is that industry consisting of developers, architects, funders and the Government should come together to formulate a sustainable ideal policy``, stressed Godrej. He made good his point by instance of the centre of excellence in Hyderabad called `Green Business Centre` which has been world`s first green building and which has succeeded in conserving energy much beyond projections.
This was followed by a panel discussion consisting of eminent panelists who discussed and debated on the challenges posed by infrastructure and whether the Indian real estate sector was sufficiently geared up to meet them. They agreed that development would happen only where there is adequate support of infrastructure.
Discussing on how to improve infrastructure links with real estate, Hemant Joshi, managing director & CEO CRISIL Risk and Infrastructure Solutions, stressed that with proper infrastructure township policies of the government can succeed and this would also lead to realistic fall in real estate prices. ``An increase in spending on infrastructure from the current 5% to 9% is critical``, said Anish Nanavaty, principal, IDFC.
``Innovative concepts in terms of real estate development in the peripheral areas, alternative funding and power trading can be regarded as some of the factors necessary to ensure the sector`s growth``, expressed Mayur Shah, director Marathon Realty. Supporting his views was Anuj Puri who stressed that over the next decade large economic activity would start in the tier II & III cities and the market forces would push the real estate growth.
Representing the Mumbai Rail Vikas Corporation was its managing director P C Sehgal, who highlighted the problems of increasing population migrating towards the periphery of the cities without adequate transport support. He called upon the industry to come together and support state railways in implementing their projects by part funding.
``Where the corporate sector has successfully entered health and education sectors, public private partnerships for building infrastructure should be given priority``, emphasized Pradeep Bhargava, chairman CII Maharashtra State Council and managing director, Cummins Generator Technologies.
Panel discussion on growing trends of the real estate sector in Tier II & III cities saw industry players and participants exchanging ideas on the opportunities and risks associated with development of these cities. ``Opportunities are abundant, what is required is an attitude change``, proclaimed Ashish Raheja, managing director, K Raheja Universal.
The panelists agreed that key drivers to development of tier II & III cities were industrialization, type of industry and education. ``Affordability and pricing are important in tier II & III cities``, said Rajeev Piramal, executive vice chairman, Peninsula Land.
Talking about the role of political support and leadership in tier II & III cities, Sagar Sheth, director Sheth Builders expressed that without the support of the political system, growth would certainly be very difficult. The forum agreed that smaller cities need more nurturing and with the right kind of policies and system vision 20-20 could be achieved.