Realty com­pa­nies sharpen fo­cus on timely de­liv­ery

De­liv­er­ing homes on time is no longer a mat­ter of choice for devel­op­ers amid ris­ing aware­ness among home­buy­ers and strin­gent reg­u­la­tory norms post RERA

Hindustan Times (Chandigarh) - Estates - - FRONT PAGE - Mad­hurima Nandy

Ris­ing aware­ness lev­els among home buy­ers, strin­gent reg­u­la­tory norms and a pro-cus­tomer ju­di­ciary have com­pelled real es­tate firms to fo­cus on timely de­liv­ery of projects and be­ing ac­count­able to prom­ises made. At a time when many devel­op­ers are fight­ing dis­grun­tled cus­tomers in courts of law, de­liv­er­ing homes on time is no longer a mat­ter of choice. To de­liver what one has promised is the essence of the new Real Es­tate Reg­u­la­tion and De­vel­op­ment Act (RERA). What this is likely to do is, put the cus­tomer at the cen­tre of the busi­ness and im­prove ac­count­abil­ity, and also change the way the sec­tor op­er­ates— typ­i­cally, home sales have al­ways been more im­por­tant than stay­ing true to what’s promised. The ca­pac­ity and in­tent to be hon­est to buy­ers are the qual­i­ties that will set good devel­op­ers apart from the rest of the pack, say devel­op­ers and an­a­lysts. “Meet­ing project de­liv­ery tar­gets is a mat­ter of sur­vival for devel­op­ers to­day. There are penal­ties to­day and the reg­u­la­tor has the power to take over the project,” said Anuj Puri, chair­man, Anarock Prop­erty Con­sul­tants. Over the past year or so, many large real es­tate devel­op­ers in In­dia’ s largest prop­erty mar­ket, the Na­tional Cap­i­tal Re­gion (NCR) cen­tred around Delhi, are em­broiled in in­sol­vency pro­ceed­ings ini­ti­ated against them fol­low­ing a fouryear slow­down in the sec­tor, and court cases ini­ti­ated by buy­ers over non-de­liv­ery of homes. Jaiprakash As­so­ciates Ltd’s (JAL) Wish Town town­ship project in Noida, which was launched in 2007, has 24,000 homes yet to be de­liv­ered to its buy­ers out of a to­tal of 32,000 units. The com­pany is cur­rently fac­ing in­sol­vency pro­ceed­ings and a res­o­lu­tion process is on. Noida-based Am­ra­pali Group in Fe­bru­ary sought the Supreme Court’ s per­mis­sion to bring in co-devel­op­ers to help build and de­liver around 41,000 flats to buy­ers. “In the boom years, devel­op­ers promised they could de­liver a project in three years, a prom­ise which can never be met be­cause it takes 5-6 years. Courts have stepped in, launch­ing projects has be­come in­creas­ingly dif­fi­cult with the RERA regime push­ing firms to fo­cus on build­ing and sell­ing homes to ex­ist­ing cus­tomers,” said Ra­jeev Tal­war, chief ex­ec­u­tive of real es­tate firm DLF Ltd. The real es­tate sec­tor wit­nessed a boom dur­ing 2005-08. The global eco­nomic slow­down did put the brake son the sec­tor, but busi­ness was back to nor­mal by 2009, and un­til 2012, it wit­nessed ro­bust ex­pan­sion. In all of this, the key stake­holder in the busi­ness—the home­buyer—was never ac­corded pride of place, lead­ing to a fun­da­men­tal loss of faith in devel­op­ers .“There is a lot of neg­a­tive sen­ti­ment among home buy­ers to­day over not get­ting pos­ses­sion of homes on time. The real es­tate mar­ket is down with no price ap­pre­ci­a­tion and slow sales. We have had de­lays in our projects which is why we de­cided let’s com­plete and de­liver projects that were launched 4-5 years back ,” said R.K. Arora, chair­man, Su­per tech Ltd .“De­liv­ery is also im­por­tant be­cause the fi­nal pay­ment of the buyer comes on pos­ses­sion of homes and gen­er­ates liq­uid­ity and we ex­pect to gen­er­ate Rs1,000 crore through it,” Arora said. In the new RERA regime, de­liv­ery is a mea­sur­able tar­get with no am­bi­gu­ity and there­fore non-com­pli­ance leads to clear-cut penal­ties where the de­vel­oper is li­able to mul­ti­ple con­se­quences, said Ram W ala se, man­ag­ing di­rec­tor and CEO, VBHC Value Homes Pvt. Ltd. “We have been fo­cus­ing on ac­cel­er­at­ing our project de­liv­ery. One needs to keep up the ex­e­cu­tion pace on the ground, have the fi­nan­cial back-up to com­plete projects with­out re­ly­ing on cus­tomer pay­ments and have all ap­provals in place,” Walase said. De­liv­ery is­sues have ailed the sec­tor due to which home buy­ers have now moved to­wards readyto-buy homes( rather than un­der­con­struc­tion ones ). While sales have been tepid, the re­turn of buy­ers’ con­fi­dence is crit­i­cal, say devel­op­ers. “...In the last three years, we have put in even more re­sources to­wards ex­e­cu­tion and de­liv­ery. Our de­liv­ery record es­tab­lishes the cred­i­bil­ity we have as a de­vel­oper. We un­der­stand that once con­sumers get a home or of­fice de­liv­ered from us, they will buy more,” Ab­hishek Lodha, man­ag­ing di­rec­tor of Lod­haGroup­said. Ex­e­cutin­gand de­liv­er­ing projects on time is ex­pen­sive. Lodha Group, for in­stance, has spent Rs4,200 crore on con­struc­tion pay outs alone in 2017-18.

MINT/FILE

Lodha Group, for in­stance, has spent ₹4,200 crore on con­struc­tion pay­outs alone in 2017­18

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