Real Estate sector is believed as second largest employment generator after agriculture in India, Says Mr Vijay Jindal, CMD, SVP Group
Mr Vijay Jindal is mentor as well as angel investor at SVP group and gives valuable guidance to the team in taking business decisions. With firm conviction, SVP Group is providing the best technology to improve caliber and building methods so as to provide future generations, the epitome in luxurious lifestyles. Their vision is a world where everyone enjoys the fruits of good living in their ideal living spaces and a country that's not just one of the many developed nations but the one that inspires the rest. SVP Group has constructed and sold several residential & commercial properties in Ghaziabad and has emerged as a leading builder of the city.
Mr Vijay Jindal, CMD, SVP Group had a one on one session with Makaan team and he shared his views on the latest trends of real estate market and their future plans.
What is your medium term (9-12 months) outlook for the real estate market in India in general and North India in particular?
The journey of the real estate industry sounds a phenomenal story. In the past few years, not only in North India but also in whole country it grew rapidly and created an enormous opportunity for real estate developers. The NCR residential market is full with a variety of housing options. Credit goes to the industrial and economic growth of the country, because of the real estate industry has moved to a more grown-up phase. And it seems growing fast if FDI would land up in the industry. India will have approximately 27 to 30 million shortages of housing units by 2013. This amount is required to carry huge development. Amongst the metro cities in India, the NCR is one of the biggest real estate market of the country covering nearly 27% of the overall retail stock. The Union government has already given its nod to Land Acquisition draft bill and expected to be cleared by the Parliament in the winter session this year. All these clauses pointing out towards a long term growth boom in the industry as well as SVP Group as an individual.
How is real estate in North India different from rest of the regions in the country?
Real Estate sector is believe as second largest employment generator after agriculture in India and could be influential in growth of cement, steel and other connected industries. South Indian real estate market is a price-sensitive market with buyers focused on affordability. Developers can adopt a strategy to ensnare potential buyers by offering right products at the right price band. Instead of, Delhi/NCR manages to offer quality flats within city limits thereby meeting the objective of the buyer, unlike Mumbai where affordability and inconvenience come hand in hand. In the second hand Delhi/NCR is the hub for Commercial, Corporate and real estate industry movements. This region has ample of developers with enormous project offers like, low budget flats, mid budget flats, high class duplexes, villas & form houses to all segments of the society. In which the price range offer by developers in Delhi/NCR region is starts from Rs. 2500/ sq. ft. to Rs.14-15,000/ sq. ft. In North India real estate has much bright options because of National Capital situated in North India. People come to Delhi from all estate of India. Hence real estate has more opportunities to fulfill their requirements in North India.
What is your opinion on Luxury or Public Housing? As a developer, which is more sustainable?
Luxury and ultra-luxury projects give up much higher returns to developers than projects towards the affordable and mid-income housing segments. Because of the affinity of ultra-luxury projects to obtain extremely good pre-sale volumes, the developers are generally able to secure significant fund flows to capitalize the completion of their projects. However the market’s strength is also reflected the fact that nearly 90% of surveyed real estate market quoted ‘generous demand’ as a motivation for entering into the low-income housing. If a developer positions himself on the basis of quality luxury projects, it automatically recognized developer for their mid-income housing projects as well. Both are sustainable only the quality that you are offering is matters.
Low cost housing has been the focus area of the government. In the past three decades, government has adopted several policies assisting the delivery of affordable housing. In the same line the affordable housing projects launched by private developers have significantly contributed to the 25% in the last five years. As a developer we are focusing on both segments and would work according the buyers/investors demand.
Having so many projects completed in Ghaziabad, which of the other cities do you think home buyers should opt for a property purely from Investment purpose?
The buyer needs to be aware of few things while buying property like, economic development of the area and the rise in inventory. Buying property in a location that is well-connected and an upcoming industrial hub is appropriate not only from the end-user point of view but also from the investment point of view also. Delhi/NCR is an enormous option because of the developed infrastructure & connectivity. SVP Group is focusing primarily in Ghaziabad and after completing 10-12 projects we are all set again to come up with some new projects in the area. We are suggesting our customers to invest in the areas where they need not to wait for years for basic infrastructure and industrialization.
The number of unsold inventory is increasing in NCR, what could be the reason behind this? Just the soaring property prices or any other factor attributing to it?
Home sales have been slow across the country for last few quarters because of the hesitated economy and unstable government in centre. Not only price hike in sector but few other factors like, high cost of loans, probable imminent of new policies also pushed away the potential home buyers and investors from the real estate market. Due to in entire NCR, developers are facing huge mass of inventory and facing running money crisis for various projects. After formation of stable government, developers are fixing their hopes on strong policies from the functional government and RBI which might prompt many obstructed customers to take the pitch.
What policies you look forward to from the Government and RBI that will be a relief to home buyers across India?
Being the part of real estate industry, we are appreciating RBI to kept key interest rates unchanged. The real estate sector has dragged a sigh of relief with this move of RBI and is expecting more economic reforms. FDI and single window Clarence is also essential to run smooth transactions in the sector. It would also help to shape more transparency in future acts between developer and buyers. However all eyes are now on first budget by Modi Government where the industry expecting some aspirations to perk up the sector like, widening of FDI norms and infrastructure figures etc.
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?
2013 saw 39% jump in addition of mall spaces over the last year and 2014 is expected to see a lot of action on the retails front due to possible entry of multi-brand retailers. As a developer this a good sign for us that market is going upward in terms of commercial space as well as increased leasing activities in the freshly-launched malls. In the modern industrialized world we are focusing towards architectural tradition and classical design to give smart growth to commercial development.Tier II cities like, Hyderabad, Chennai, Chandigarh, Ahmedabad and Pune similarly attracting development of SEZs in various segments of MNCs/corporate/real estate developers as Tier I cities like, Mumbai, Delhi & Bangalore. Liberalization of FDI norms, Indian securities market regulator SEBI & real estate mutual funds (REMFs) all these factors will contribute in making the Indian real estate market more organized and structured.
What can the home buyer’s expect from SVP Group over next 1-2 years?
Year 2013 was a year of endurance for the real estate sector, but expectations are now high among developers and analysts. However as SVP Group, we performed and delivered our buyers expectations within devoted time frame in such fluctuated and uncertain economic conditions of the country. And our customers / investors also showed that faith that we need in such crucial time. Keeping that faith in mind we bound to deliver that trust without breaking the succession in future as well. Hence not only in coming 1-2 years, SVP Group is determined to carry the quality and transparent policies on the top of the real estate industry. And in shaping the dreams of our customers we would come up with new projects further in NCR and also hoping to other Tier I & Tier II cities of the country.