Interest rate reduction and increased incentive from Govt required for real estate growth - says Venkat K. Narayana
Mr. Venkat K. Narayana, ED & CFO, Prestige Group, has been associated with the organization for over 9 years, where he heads the finance function. He has been instrumental in introducing private equity investments into the Group and for entering into several joint ventures. He has pioneered several strategic initiatives to success within the company. He was the driving force behind the successful IPO and listing of shares of the Prestige Group on the Indian Bourses.
MakaanIQ got an opportunity to interact with Mr. Venkat. In this brief interaction he shares what is in store for the realty sector in the coming few years….
1. What is your medium term (9-12 months) outlook for the real estate market in India in general and South India in particular?
Prestige group predominantly operates in South India. Market in South India especially when you consider Chennai and Bangalore is very good. Next 9-12 months time will also continue to be good. If the interest rates start coming down, the situation can further improve, thus adding on to the prosperity in the market. It is difficult to comment on the Indian Real Estate market as a whole as it is made up of various micro markets and each micro markets behave differently with completely different demands, supply and Price structure.
2. How is real estate in South India different from rest of the country especially North and west Markets?
South Indian Markets are very stable and do not react too fast to minor changes in the economic environment keeping property price oscillations to minimum. Property comes at affordable prices in Southern cities, and the property price movements remain steady. The unique feature that is present in the southern market is the basic quality of development. Lot of customers say that, It is far better compared to other markets. The companies playing in this areas are also well governed and are transparent in their transactions. They are highly approachable to the consumers making the environment highly consumer friendly. The combination of all the factors above makes it a unique market.
3. What is your opinion on Luxury or Public housing? As a developer, which is more sustainable?
If one looks at the Indian population, majority of it comes at the middle income group and hence mid-market and affordable housing market volume is certainly high. Luxury community is small and the volume for it is also less, but the price may be higher. A developer with Good brand name, must have a sound mix of both in order to sustain in the industry.
4. Having so many projects completed in South India, which of the south Indian cities do you think home buyers should opt for a property purely from investment purpose?
For a investment purpose, Bangalore is a good market compared to others in South India, followed by Chennai.
5. The number of unsold inventery is increasing in ciries like Bangalore, what could be the reason behind this? Just the soaring property prices or any other factor attributing to it?
The brand name of the developer, the reliability factor, development quality coupled with price and locality influences the sales of the projects. With the kind of responses we are getting from our customers, we do not actually have any inventories in stock of completed projects.
6. What policies are you looking forward to from the Government and RBI that will be a relief to home buyers across India?
Interest rate reduction from RBI and probably some tax benefits from Government in the form of increased deduction towards interest paid on home loan. Both have been due for quite some time now.
7. What is the current trend in the commercial Real Estate Market? How are developers meeting the increasing demand of the corporate sector? Which are the upcoming corporate bases?
Commercial real estate market in South India is doing quite well. Lot of companies are looking for office spaces. At least there are lot of enquiries. Bangalore has been seeing 8-9 million square feet of leasing every year on an average.
8. What can the home buyers expect from Prestige Group over next 1-2 years?
We have, during last 4 quarters launched several new projects totaling to 15mn sq. ft. in the form of Prestige Tranquility, Park View, Sunnyside, Silver crest, May Berry, Garden Bay etc. in Bangalore and Prestige Bella Vista in Chennai. All these projects have met with very good response from the customers. We have very good lunch pipeline to the tune of 6-8 mn sft, for the rest of the year as well. We have several new launches coming up at good and diversified locations, in the mid income category at attractive prices with no compromise on quality, with world class amenities .