Growth Trends in Real-estate

Realty Plus - - Editor-In-Chief Note -

TDI In­frat­ech has been de­vel­op­ing projects in Delhi NCR and the tier-ii and tier-iii cities in the north­ern belt of In­dia. Akshay taneja, manag­ing Di­rec­tor, tdi in­frat­ech ltd. shares his views on the re­cent de­vel­op­ments in the real-estate sec­tor.

Q What are the rea­sons for de­vel­oper’s in­cli­na­tion to­wards tier II cities?

Tier -I cities are now get­ting sat­u­rated while, smaller cities and non-met­ros are gear­ing for de­vel­op­ment. There­fore, de­vel­op­ers too are broad­en­ing their av­enues and reach­ing out to tier-ii and III cities. For in­stance, in Kundli, Pa­ni­pat, Mo­hali I & II and Mo­rad­abad, TDI in­flu­enced the for­ward surge of th­ese towns by de­liv­er­ing five town­ships spread over an area of 2480 acres.

Also, with Smart cities and Hous­ing for All schemes, there will be an up­surge in job op­por­tu­ni­ties, sound in­fras­truc­ture and ba­sic civic setup for even smaller cities. A de­vel­op­ment at such a mas­sive scale will re­quire a joint con­tri­bu­tion or a PPP model where pri­vate sec­tor can play an im­por­tant role. A na­tion­wide de­vel­op­ment plan will mean that the pri­vate sec­tor will be uti­lized to the core.

Q How do you see the de­mand for com­mer­cial real-estate grow­ing in next few years?

REIT as an in­vest­ment ve­hi­cle has a huge op­por­tu­nity in In­dia. Cur­rently, In­dia has a rent-yield­ing of­fice in­ven­tory to the tune of 537 mil­lion square feet val­ued in ex­cess of USD 70 bil­lion. Other prop­er­ties like ware­hous­ing, re­tail malls, shop­ping cen­ters, school build­ings, etc. are po­ten­tial REIT as­sets too. RBI’S de­ci­sion to al­low banks to in­vest in REITS within the over­all um­brella of 20% of their net owned funds is a huge pos­i­tive. De­mand for res­i­den­tial prop­er­ties is likely to fol­low trend, how­ever, CBD com­mer­cial prop­er­ties are sure to at­tract more de­mand rather than pe­riph­eral de­vel­op­ments.

Q What will be the im­pact of RERA and GST on real estate sec­tor?

RERA and GST have by far been the two big­gest re­forms that In­dian real estate has wit­nessed in such short suc­ces­sion. A com­mon mo­tive of both RERA and GST is to boost buyer’s sen­ti­ment and con­fi­dence in real-estate. RERA’S ef­fects will be vis­i­ble more in the res­i­den­tial realestate seg­ment, while GST will be greatly ben­e­fi­cial for the com­mer­cial re­alty seg­ment. Also, with the in­put tax credit ben­e­fit be­ing passed onto the buy­ers, over­all de­mand is ex­pected to pick up pace by the end of the year i.e. around the fes­tive sea­son. We feel, the project sales will grow by 5-10 per cent an­nu­ally over the next 3-5 years.

Q Is af­ford­able hous­ing pos­si­ble in the NCR re­alty mar­ket?

NCR at present is a com­pi­la­tion of 23 districts where only few re­gions such as Noida, Ghazi­abad, Greater Noida, Gur­gaon, Farid­abad and oth­ers have been tapped for the real-estate de­vel­op­ment. Thus, land is still avail­able in abun­dance and if th­ese land parcels are of­fered to the de­vel­op­ers at sub­si­dized rates, the de­vel­op­ment cost will be­come lower mak­ing the projects much af­ford­able for home buy­ers. With govern­ment ac­tively in­cen­tiviz­ing the af­ford­able hous­ing seg­ment, more de­vel­op­ers are now en­ter­ing into this res­i­den­tial seg­ment as it prom­ises a long term de­mand.

Q What are the fu­ture plans and up­com­ing projects?

TDI de­vel­op­ments are largely con­cen­trated in Delhi NCR area with 89% of the to­tal projects in prime lo­cal­i­ties like Con­naught Place, Pa­tel Na­gar, Karol Bagh, La­j­pat Na­gar, Ra­jouri Garden, Saket, Ja­sola, Gur­gaon and NOIDA, while the rest of the 11% com­pleted projects are in UP. The prime mo­tive of TDI In­frat­ech right now is to main­tain the timely de­liv­ery of projects that are in ad­vanced stages of com­ple­tion. Till then, no new launches have been planned for near fu­ture.

akshay taneja

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