Modern and upcoming growth corridors in Delhi NCR - Says Mr Ravi Saund, CHD Developers
Mr. Ravi Saund, COO, CHD Developers holds a Bachelors Degree in Commerce from Sydenham College, Mumbai and he further pursued MBA from Sydenham Institute of Management and Research, Mumbai. He is also a proud alumnus of The Scindia School, Gwalior, Madhya Pradesh. With over two decades of experience in the real estate sector, his impeccable knowledge of market dynamics has helped him successfully launch various projects in sync with the requirements of the market.
1. What is your medium term (9-12 months) outlook for the real estate market in India in general and North India in particular?
The Domestic real estate will continue to jostle with swelling cost of construction, rampant shortage of skilled workforce at all levels, lack of availability of serviced urban lands, absence of single window approval system, slow reforms and unavailability/dawdling pace of growth in infrastructure. Transparency with customers is one factor that developers need to review before it gets too late.
For all of those who were hoping for 2013 as a brighter year for Indian Office Market, the year did not give them any reason to cheer. Demand will take a further dip and the vacancies will go up. It is very unlikely that rents will tumble down further. However, Special Economic Zone market will burgeon as IT companies in quest of reduction in cost of operation and benefit from the related tax incentives will relocate to IT/ITES SEZs. Investor sentiments in this asset class will continue to remain cautious. On a promising side, these market conditions will be propitious for tenants due to cost advantage and demand-supply mismatch.
The Indian retail sector looks upbeat in the next year as major foreign brands and indigenous retailers are all set to implement their expansion plans in the metros as well as select Tier II and Tier III cities. FDI in retail will also open fresh avenues. High street will continue to grow and give a tough competition to malls. Vaccancy levels in malls will depend on the amenities and infrastructure that the malls offer. Superior malls will have lower vacancy than the inferior ones. Rentals will get a push in superior malls.
Residential segment will continue to grow. The first quarter may witness a decline in project launches but the mid of second quarter will turn the story around. The mid-segment and upper mid-segment are likely to grow. In order to benefit in the long run, developers would have to concentrate on timely execution of projects. Rising high on stable demand and the greater possibility of lower interest rates, the market will see an upward trend. The residential market might remain cautious over short term but the borrowers are not likely to postpone their buying decision. The investors will shake off their hesitation when the Indian stock market again becomes a favoured investment destination. Again, India will be an attractive investment opportunity. Home prices are expected to undergo a wave of high appreciation after six months.
Innovative designs, technology, eco friendly constructions, customer satisfaction and pace of development on site would hold the key to success of a developer in the coming year. Construction of Avenue 71 is ahead of schedule. This was a major reason for record sales of 106 Golf Avenue, our latest offering on Dwarka Expressway, Gurgaon. We also expect mid-segment housing to continue being popular. The mid-segment housing will see tremendous growth especially in the Metros and Tier II cities.
The government has been supportive with the policies to revive the real estate industry through great infrastructural development ranging from better connectivity through metro and road transport to improved amenities. This has acted as a catalyst for new projects. Even in 2013, we expected constant support from government. With special focus on infrastructure development which will brighten the future of NCR. With the customer becoming increasingly aware of the latest offerings and a regulatory body in tow, we can look forward to improved synergies between developer and the audience.
2. How is Real estate in Delhi and NCR different from rest of the country specially South and West markets?
The NCR is the largest residential market in the country due to the volume of residential units launched. It has more units than the combined units of the other five metropolitan cities of Mumbai, Chennai,Bangalore, Kolkata and Hyderabad. NCR also has a huge floating population pouring into Gurgaon, Noida, Greater Noida and Faridabad every year, comprising higher, middle and lower-middle income groups from different parts of the country. It has been the epicenter of Real Estate activity in the country. The infrastructural development has been in sync with the Real Estate growth. With rising demand in residential, office, retail, and hospitality sectors, Gurgaon is on top in the demand chart.
3. What is your opinion on Luxury or Public Housing? As a developer, which is more sustainable?
The last year witnessed a slump in the sale of Luxury homes while mid segment saw heightened sales. CHD will continue to focus on servicing the residential needs of the upper and upwardly mobile Indian middle class in Delhi NCR and focussing predominantly in Gurgaon. This model has been sustainable for us and the projects have received tremendous response. The demand for homes in this segment is likely to increase all the more in the coming year.
4. Having so many projects completed in Delhi NCR, which of the North Indian cities do you think home buyers should opt for a property purely from Investment purpose?
The new infrastructure initiatives taken up by the government has boosted the real estate market in Gurgaon and facilitated new areas of growth. Delhi, Gurgaon and Noida are some of the North Indian cities that will have the highest potential for residential growth in the next year. The major new growth corridors in Gurgaon include extended Golf Course Road, Sohna Road and Pataudi Road.
5. The number of unsold inventory is increasing in cities like Delhi & NCR, what could be the reason behind this? Just the soaring property prices or any other factor attributing to
it?
A combination of factors like slow demand and rise in property prices might be the reason for unsold inventories. Some developers are also affected by regulatory bottlenecks like project approvals and land-acquisition related uncertainties. We, at CHD, ensure that the prospective consumer is not hassled by any legal issues and all the approvals are in place for our projects.
6. What policies you look forward to from the Government and RBI that will be a relief to home buyers across India?
The RBI has kept the Repo Rates unchanged for quite some time now. We hope to see a cut in the next Credit Policy to ensure more liquidity flows in the real estate sector. We are also awaiting for the proposed Regulatory Bill to be implemented soon. The bill will boost transparency in the Indian real estate sector by standardizing practices & streamlining government procedure systems. This will help bring about a greater level of trust between buyers & sellers, landowners & developers and also developers & financial institutions that fund them. It will be a big step in recognizing Indian real estate as an industry, since it means that the real estate sector is perceived to have attained a certain degree of scale which warrants a regulatory agency with transparent rules, regulations, safeguards and redressal systems.
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?
Not everything was gloomy in the real estate segment. Commercial sector grew healthier and stronger in 2012. The retailers began to expand their footprints. The NCR showed highest absorption rate. Mid-income segment saw maximum launches and were a success all through. The luxury segment grew at a slower pace. Interest from international real estate investors in Indian real estate has been limited in 2012. On the whole, it was a mixed year for most of the developers.
Market picked up by 20% to 40% as compared to the previous year. According to a study, prices of residential properties across major Indian cities have risen by up to 12% in 2012. Green was passé and sports replaced it when it came to master planning. In 2012 NCR observed projects based around golf, soccer, cricket etc. Healthy Lifestyle became the new slogan. A significant number of fresh projects were launched this year in NCR but the delay in approvals deferred time lines. Indian realty was grappling with the ever increasing cost of construction, scarcity of labor and rising interest rates. Need for a regulatory authority was felt more than ever.
Gurgaon is now the Central Business District of NCR. Real Estate Demand across all segments – low, middle and upper middle is increasing. To facilitate the home buying dream of the Corporate employees we have launched the Subvention Scheme for our projects.
The new infrastructure initiatives taken up by the government has boosted the real estate market in Gurgaon and facilitated new areas of growth. For instance, with the Dwarka Expressway coming up, there has been a sudden surge in demand for properties in and around the Expressway. The Dwarka Expressway will improve connectivity between Delhi and Gurgaon. The major new growth corridors in Gurgaon include extended Golf Course Road, Sohna Road, Pataudi Road.
8. What can the home buyer’s expect from CHD Developers over next 1-2 years?
At CHD we have always bestowed the middle class with premium lifestyle that doesn’t cost a fortune. In the next year, we will give NCR another novean concept. An out-of-the box theme will rule the roost. We intend to launch Spanish Meadows, Spanish expandable villas in CHD City, Karnal.