One must deliver on time and cater to the needs of the customers: Says Mr Sujay Kalele, Group CEO, Kotle Patil Developers Limited
Founded 2 decades ago and guided by a simple yet profound philosophy; 'Creation, not construction', Kolte-Patil Developers Ltd. is one of the foremost real estate companies which is headquartered in Pune. Listed on NSE and BSE Kolte-Patil is Pune's largest developer and has completed 1 crore sq. ft. of landmark developments in Pune and Bengaluru. It is also present in Mumbai with some upscale redevelopment projects. Kolte-Patil has till date built projects in multiple segments such as residential, commercial, retail, IT parks, and integrated townships. The long standing mission of the company is to dedicate itself to create spaces that blend in with the surroundings and exude vitality and aesthetic appeal, making the spaces present-perfect and future-proof. Makaan IQ got an opportunity to have a conversation with Mr Sujay Kalele, Group CEO, Kotle Patil Developers Limited. Lets see what he has to say:
Q1. What is your medium term (9-12 months) outlook for the real estate market in India in general and West India in particular?
The onset on a new pro-reform government in 2014 is set to benefit the real estate industry. The new government's policies look very positive. There is a promise increased transparency from the state and central government and policy transmission as well. Earlier, policies were made just to favour a few lobbies; now they are intended to be fair and meant for all. The Real Estate Regulation Bill is a step towards ensuring stricter adherence to the norms and regulations by the real estate players. The customer’s fears towards real estate companies have been addressed and there are proper laid out rules and regulations to those who falter to deliver their promises. Hence, it would make property buying far more secure and bring in more transparency and accountability. Land Acquisition and Rehabilitation and Resettlement Bill that is yet to be approved is also expected to be another step towards regulating the real estate sector. Also easing of FDI norms on construction development would give a boost to the real estate sector in terms of greater capital inflows and a regulatory body, which is being planned, will increase foreign investments exponentially.
The threat of inflation is subsiding, and borrowing rates have gone down from the earlier levels. These factors will encourage potential buyers planning to avail of home loans to finally throw caution to the wind. Also, with property prices staying stable and good deals being offered by Real estate developers fence-sitting buyers be further encouraged to buy their dream home.
Economic activity is gradually picking up, and the Central Bank anticipates GDP growth to reach 6.5 per cent y/y in the next financial year (FY2015-16). With Corporate India promising increased hiring of talent, there would be considerable increase in business activity. Simply put, this means a rise in jobs and incomes, which in turn is very encouraging sign for both residential and commercial real estate.The most expensive properties are located in the Western region of the country since Mumbai is the financial capital of the country. As soon as the economy begins to swing towards growth, west would be the first region to respond positively.
Q2. How is real estate in West India different from rest of the regions in the country?
It is very difficult to treat West India as one cluster. There are several micro-markets within each city in West India that behave very differently from one another. For instance Pune as a real estate market is very different from Mumbai and within Pune, Kharadi is very different from Pimple Nilakh. But there is no doubt that infrastructure has made a big difference to real estate growth in West India, whether it is Pune, Ahmedabad or Mumbai.
For example, the Santacruz-Chembur Link Road (SCLR) and the Eastern Freeway have really opened up Chembur. Where two years ago, property at Chembur was available for an average price of Rs 9,000 – 11,000 per sq. ft., now nothing is available for less than an average price of Rs 20,000 a sq. ft.The Western Express highway becoming signal-free; the Kherwadi flyover and the Metro have also made a huge difference to locations like Andheri, Vile Parle and Ghatkopar.
In Pune, Pune Metropolitan Region Development Authority (PMRDA) has been given the task of overseeing planned development in Pune and PCMC (Pimpri-Chinchwad Municipal Corporation). This will lead to timely infrastructural development. In Pune, NRIs are looking at locations like Kharadi, Wagholi and NIBM in the Eastern corridor and places like Baner, Wakad and Hinjewadi.
Q3. What is your opinion on Luxury or Public Housing? As a developer, which is more sustainable?
Every business has to play to their strengths. As a developer one needs to identify what one’s strengths are and play to their advantage. Forget real estate, even in automobile industry you could deliver a car meant for the masses or deliver a car for a luxury customer. Either of them, could prove to be profitable, sustainable or fatal for the business. Thus every developer should identify their core competencies and deliver projects accordingly. Luxury or Public housing doesn’t matter. At the end of the day, one must deliver on time and cater to the needs of the customer.
Q4. Having so many projects completed in Pune and if you can specify the cities, which of the other cities do you think home buyers should opt for a property purely from Investment purpose?
Q5. The number of unsold inventory is increasing in Pune. What could be the reason behind this? Just the soaring property prices or any other factor attributing to it?
This is a very complex issue. The rising unsold inventory cannot be simply attributed to one factor. Soaring construction prices, delay in permissions are definitely a contributing factor but majorly it is due to the market sentiment towards real estate industry. There is a hesitation amongst the home buyers which is expected to take a turn soon
Q6. What policies you look forward to from the Government and RBI that will be a relief to home buyers across India?
Recognizing the importance of housing and real estate sectors, the Union Budget for 2014-15 has included several announcements such as development of 100 new smart cities in the country. 4,000 crores allocated for low-cost housing and 50,000 crores for urban housing and increase in deduction limit on interest paid on home loans. This would encourage a lot of fence sitters to finally take a home loan to invest in the right property.
Q7. 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?
Over the past decade, not only has the speed of construction picked up, but the quality of office space too. Optimal design, building specifications and overall work place environment - everything has undergone a dramatic transformation. Indian developers are now able to provide office spaces that match the level of international occupier expectations. Hence, office take-up in terms of square foot leased per year has increased.
Due to the low availability of land in the city centres, the developers are looking at moving beyond the CBDs of the cities and creating altogether new commercial hubs. Whether you look at the growth of Gurgaon as an alternative to Delhi’s corporate base or development of Hinjewadi in Pune, developers are increasingly looking at moving out of the city hubs to create new corporate hubs that cater to the needs of the corporate occupiers of international repute.
Q8. What can the home buyer’s expect from Kotle-Patil over next 1-2 years?
- Increase in customer and partner convenience
- Increased use of technology to smoothen the home buying process – (both pre and post sales)
- Staying up to date with new construction techniques that can improve quality or reduce cost and time of construction further
- More projects for all three segments : affordable, premium & luxury and a new segment for old age
- Extending presence to new cities – Delhi & Hyderabad
Increased presence in Mumbai