CHENNAI: Government policy needs to include more thought from the corporate sector
The Real Estate industry is a key industry to which the growth of India’s GDP is directly linked. To discuss the complexity in the industry Confederation of Indian Industry (CII), organized its flagship ‘CII Real Estate Conclave ‘with the theme ‘Embracing The Complexity of Indian Real Estate’.
“Is the real estate industry complex or complicated? It is important to have this clarity about each aspect we deal with in the industry because solutions will flow from this,” began Mr. Firdose Vandrevala, Chairman, CII National Committee on Real Estate & Housing and Chairman & Managng Director HIRCO Developments Pvt Ltd.“Corruption is complex. Supply chain is complex and disorganized. Construction is complicated. Demand is complex with a lot of speculative short term investors, long term investor, rental markets and genuine actual users. Financial markets are complex while transactions are complicated,” he continued.
Mr. Vandrevala added, “You have to look at the system in parts and at the same time you have to look at the whole because solving problems of the parts cannot necessarily solve the problem of the whole. Understanding this will ensure that we do not apply the wrong approach to the right problem that happens when we mix up.”
CII and International property consultancy Jones Lang LaSalle India, in partnership released its report ‘Emerging Investment Hotspots – Mining Opportunities From the Complex Real Estate Terrain of India’ at the summit. Jones Lang LaSalle India, as Knowledge Partner for the Summit, designed this report to dovetail with the event’s theme – Embracing the Complexity of Indian Real Estate: Adopting a Pragmatic Approach for 2013 and Beyond.
Mr. Anuj Puri, Chairman CII Real Estate Conclave and Chairman & Country Head, Jones Lang LaSalle India said, “India has its own unique and integral complexities, and doing business here is no exception to this fact. Corporations strive for increased efficiency and productivity amidst these complexities – and real estate is an integral ingredient in the formation and growth of all businesses. On the flip-side of the real estate sector’s inherent uncertainties are the opportunities created by them in the real estate sector. Investors stand to capitalize significantly from these opportunities. However, in such an environment of uncertainty, returns through capital appreciation and security of the invested capital are obviously prime concerns. The pertinent question of where to invest needs to be answered. This report seeks to do just that.”
Mr. Puri added, “The industry needs to come together and put in a lot of thoughts about the issues involved like the availability of space for sale despite increasing rent, expected growth of tier 2 and tier 3 cities not having fructified, unsold inventory being at an all time high even as prices continue to rise etc.”
Mr. Lalit Kumar Jain, Chairman, Kumar Urban Development Ltd., said, “Firstly, in this country there is a stigma about the housing industry. Then there is a policy paralysis where only a few states talk about land reforms. Today in any project 70-80% of the cost is of land. How do you then expect property prices to go down? So the main issue is about land cost reforms.”
He went on to add, “We want a regulator but 90% of regulation today is about delay. The regulator needs to think about how the new bill will benefit all the stake holders involved. Government policy needs to include more thought from the corporate sector.”