India's Real Estate Sector is seeing a resurrection with the several structural changes initiated by the government in 2017. The Government has put housing on a high growth trajectory by offering tax and fiscal incentives to builders and consumers, and through new consumer-friendly policies.

It is anticipated that institutional financing, higher limit on external commercial borrowings (ECB) will attract more investments in the real estate and infra sector from FDI and FIIs. The Real Estate Investment Trust (REIT) is another instrument that has been welcomed by the industry. Though hiccups remain, and implementation is somewhat tardy, market players are optimistic of a positive outcome in the long-term.

Company heads of Hiranandani Group, Supertech Limited, Transcon Developers, Spenta Corporation, and Aparna Constructions, disclose the impact of the Government policies and regulatory changes on their business, their commitment to comply with the regulatory changes, and their anticipation of a resurgence in residential, real estate, retail, logistics and warehousing retail sectors, all of which bodes well for the Construction Equipment industry.

Government Policies
Is India's Real Estate sector seeing a revival of sorts in view of policy reforms such as RERA, GST, REITS and the Benami Transactions (Prohibition) Amendment Act?

Niranjan Hiranandani
Dr Niranjan Hiranandani, co-Founder & MD, Hiranandani Group: Business cycles tend to be predictable – any phase which is defined by slow movement and low take-off is followed by a period of higher sales and price-point increases. India is also witnessing the initial phase of the next 'upswing', the regulatory changes and also the new legal framework will enhance the growth level. This will ensure a better situation for developers and property buyers by bringing transparency and accountability within the system.

RK Arora, Chairman, Supertech: The realty market has absorbed all the reforms, which gave much confidence to homebuyers. The markets of Delhi NCR saw corrections in some popular housing pockets of Gurgaon and Noida, and their sales volume has increased in the wake of these price corrections. Now, the sector is showing signs of recovery, and both mid- and affordable-housing segments are registering improvements in sales.

Aditya Kedia, MD, Transcon Developers: The reforms have brought about a swift, efficient, accountable and well-timed project delivery. By implementing these policies, the interest of the end buyers has been protected, which has brought a positive sentiment in the property market. These constructive measures will bring in augmented transparency and accountability, and by enhancing the industry's reliability, it would attract more sources of investment. Due to an increased fluidity in the market, FDI could also surge.

Farshid Cooper, MD, Spenta Corporation: Real Estate has long suffered from reputational issues. The new policies have helped alleviate consumer fears and anxieties. If SEBI and the stock market are anything to go by, we can expect increased volumes in our sector over the next few years. The implementation of GST was particularly cumbersome as the sector faced temporary paralysis from a transaction standpoint. That said, the longer-term benefits of a single tax structure are evident. In a nutshell, the steps taken by the government to streamline our industry are starting to take shape and the benefits are bound to follow.

RERA has immense potential to revive buyers’ confidence and drive momentum in the residential real estate market. States such as Maharashtra, which implemented the regulation in true letter and spirit, witnessed signs of uptick in residential sales and overall consumers’ sentiments. We have maintained in the past that the resurrection of the Indian real estate rests on the long-term benefits of such structural reforms
Shishir Baijal, CMD Knight Frank India

Aparna Constructions

Impact on Business
How have you revamped your business model in view of the above?

Dr Niranjan Hiranandani: As a responsible corporate entity, we have been following these aspects in course of our business since past few years. The regulatory changes impact those real estate companies which were following other ways of working. What we have been following for all these years is effectively what the new regulatory regime brings in.

RK Arora
RK Arora, Supertech: We have fast tracked our operations and are determined to deliver all our projects on time. The ₹1,000 crore receivables from the buyers for delivering about 17,000 units by end of December 2018, will be further utilised to repay our debt and remaining for the completion of projects. We have well-maintained escrow accounts for all projects and are committed to comply with RERA norms by registering all our projects. We are also working on asset monetisation like our five-star hotels and malls in tier-II cities. This will help us to create further liquidity.

Aditya Kedia, Transcon: Transparency has always been a key pillar in our business model so it was easy to adjust to the new situation. Prior to RERA, our strategy was to sell almost 60% stock before OC and the balance stock after OC; now we are selling only 50% stock before OC and balance will be sold after OC.

Farshid Cooper, Spenta: Our adjustment to RERA was fairly swift largely because we were already following several of the processes laid down by RERA. Be it best practices in construction, accounting or transparency, the adjustment for us, if any, was minimal. But we were a little less prepared for GST, and following its implementation, we had several brainstorming sessions and set up several systems and processes to ensure a smooth transition and to ensure that our customers and suppliers were also kept abreast with the changes we had decided to implement. I wouldn't say that our long-term strategy or business model in general was disturbed or revamped as a result of RERA or GST, just minor adjustments to align ourselves with the changing environment.

Despite being centers of opportunity, the cities of India bring with them a host of environmental and infrastructure challenges, from pollution to lack of civic amenities like drinking water, sewage, housing, and electricity. The challenges that this sector faces require the support of all stakeholders. Availability of long-term low-cost fund is still the biggest challenge for the housing sector
Sriram Kalyanaraman MD & CEO, National Housing Bank at an ASSOCHAM event in New Delhi


Impact on Price
The ongoing infra development such as metros, bridges, airports, stadiums, manufacturing hubs, etc, is giving a fillip to the realty landscapes of micro-markets in many parts of the country. How will this impact real estate prices in the short and long term?

Dr Niranjan Hiranandani: Infrastructure development helps enhance real estate development not just in micro-markets but also enhances connectivity, making distant areas and locations closer. Pricing for real estate is a function of demand and supply: more the demand, the price movement will be upwards; more the supply of right products that suit the requirements, the off-take will increase. So, as economy grows and businesses prosper, a hike in demand will be accompanied by price movement, which will be in sync with the same.

RK Arora, Supertech: The growing confidence in the sector is expected to provide a fillip to institutional funding, resulting in an access to price-competitive options. This, too, will lead to a rationalisation of property prices across the real estate sector. Also, the growing confidence in the sector is expected to provide a fillip to institutional funding, resulting in an access to price-competitive options.

Aditya Kedia
Aditya Kedia, Transcon Developers: The proposed infrastructure developments will bring super connectivity benefits in Mumbai. The economics of transportation infrastructure are going to bring a positive hike in sales of real estate properties.

Increase in the value of land, will attract property developers and end users to invest in areas that are close to metro stations and airports because of the location's potential and fast connectivity. After the metros' completion, price value of these properties is going to be at peak height. This positive impact will be on both the residential and commercial sectors. Because of easy connectivity, more and more corporate offices and social infrastructures will flourish.

Farshid Cooper, Spenta: It is natural that infrastructural expansion will create pricing mismatches in several geographies. Areas that become more easily accessible, will increase in price as demand increases, and vice versa for places that remain remote. As a result of connectivity, more areas are likely to see a radical change in development as infrastructure reaches more and more remote areas. In the near term, pricing will remain stable for these areas and the first movers will take advantage of pricing anomalies. As supply in these areas gets built and communities form, pricing in the long-term will increase.

Foreign Direct Investment
With global investors seeing India's Real Estate sector as an attractive investment destination, what growth potential do you foresee for this sector?

Dr Niranjan Hiranandani: Sky is the limit, we have a huge untapped local demand which we are unable to meet, if global investors see value in investing in Indian real estate, we should see high growth potential for the sector.

RK Arora, Supertech: Supertech fully comprehends the prevalent and upcoming industry trends which are bound to have significant implications for Indian realty. Groundbreaking developments like RERA and GST have created a strong base for the sector to grow, which coupled with India's strong economic advancement, have provided a perfect springboard. The Indian real estate sector is now quite evidently on an upward trajectory backed by the efforts of industry stakeholders and the government.

FDI has certainly turned the tide for the construction development sector, which was facing subdued demand and disruptive policy changes over the past few years. As per DIPP report, just in nine months of FY 2017-18, FDI equity inflows into construction sector rose by around 250% over FY 2016-17 levels. However, only time will tell if the revival of FDI equity inflows into the construction sector is sustainable and will culminate in a full-fledged comeback. The macroeconomic fundamentals are surely encouraging, and if the latest policy initiatives stand strong, we will certainly see the next wave of development announce the arrival of India 2.0 to the world
Shobhit Agarwal, MD & CEO, ANAROCK Capital


Aditya Kedia, Transcon Developers: Many reputed international companies are keen on investing in India as they see real estate economy as one of the fastest growing economies. Ease in FDI rules is sure to bring in a constant flow of investment. Thanks to the PE funds, efforts have been made to influence international investors. Also, risk management programs and strong management of valued assets, opens the Indian financial corridors for overseas investors. There is also a great demand for off shore funds and FDI funds in Indian real estate. Further, leveraging our organized debt platform, will be a great way to raise money from these funds. Entry of foreign investors will not only lead to an escalation in investment capacity but will also lead to an upsurge in the average size of the asset.

Farshid Cooper

Farshid Cooper, Spenta: At the moment, it seems that global investors are eyeing India for returns while still keeping an eye on the social impact their investments may have. The affordable housing segment is likely to attract significant foreign capital in the near term for this reason. Foreign investments in the long-term, however, will depend on how current investments perform, and will rely on how the “ease of doing business” story pans out over the next few years. A stable government, clarity in taxation and currency risk will continue to be treated as important factors for sustained long-term investment.

Sectoral Growth
Which sectors (retail, hospitality, residential, industrial, warehousing, institutional etc) will attract the most (new) projects and investments?

Dr Niranjan Hiranandani: Different locations and the economic growth potential they offer, will also result in different segments of commercial real estate getting a fillip in those locations, and all of these will attract new investments.

RK Arora, Chairman Supertech: The Government's efforts to boost "affordable housing" by conferring "infrastructure status" to this segment and announcing various tax incentives will continue to attract more prominent developers to realign their products to compete in this category. Affordable housing will therefore, become an important segment in every developer's portfolio this year. Developers could also be focusing on their niche expertise specialising in the various segments of real estate, e.g., plotted developments, residential projects, townships, and commercial spaces; and hence, specialist service providers could be seen emerging in each of these categories.


Aditya Kedia, MD, Transcon Developers: The Indian warehousing sector is a chief contributor to the realty business growth and is an imminent and favourable trend in the commercial real estate sphere. With the execution of GST, the prospective of warehousing has only amplified. The small, ill-armed units of storage have made way for expansive, high-tech, air-conditioned facilities. The single-tax regime now offers freedom to pick any part of the country for your storage needs. The warehousing sector is set to see a flow of private equity investments. It has been reported that the Indian supply chain arm of an international logistic major has committed a deal of more than $160 million to double its warehousing capacity. Many such investments are set to present large-format contemporary warehousing infrastructure in India.

Farshid Cooper, Spenta: In a country with a population of 1.2 billion, most of who are still to buy their first home, it is clear to me that residential real estate will likely attract the bulk of the investment. As our economy continues to open up and foreign companies look to enter, I expect the industrial and warehousing industry to also gain momentum over the next few years. The governments push towards 'Make in India' and the impetus given to start-ups, will also fuel growth. The ripple effect of this will spur consumption and growth in retail, hospitality and residential real estate as well.

Rakesh Reddy
Rakesh Reddy, Director, Aparna Constructions: The residential, real estate, logistics and warehousing and retail sectors are expected to attract new projects and investment in the next 2-3 years. In this years' Budget, the Government allocated ₹5.97 trillion in creating and upgrading the country's infrastructure in the current financial year. Affordable housing category, in particular, is expected to get a major boost with the budget allocation. MOUD's recent announcement to increase the carpet area definition for MIG and RBI's move to increase the loan limit under PAMY are initiatives that will generate positive momentum and surely work in favour of the industry players and in the best of interest of the home buyers.

Additionally, the risk associated with the sector has been controlled a lot with the introduction of RERA and the outcome is clearly visible with the measured yet steady return of investors in the market. Builders with a credible reputation will continue to launch new projects secured by trustworthy financial institutions and they will continue to market them to a highly responsive clientele. This is indeed the best time for home buyers to invest in real-estate for both personal use and futuristic investment.

Construction Equpment & Technology
What new construction technologies and equipment are you deploying for timely completion and good quality work of your projects?

Dr Niranjan Hiranandani: We follow global best practices, from Mivan shuttering technology and site cranes for high-rise construction to use of ready mix concrete as also enhanced mechanization. Most of these steps are being implemented by leading real estate construction companies across India, and we are very much in sync with the same.

RK Arora, Chairman Supertech We are the first developer in NCR to use Precast, Jump Form and Tunnel Form technologies that have enabled us to complete our projects at lesser time than industry standards, with its focus towards 'Pradhan Mantri Awas Yojana', an initiative towards 'Housing for All'.

Farshid Cooper, Spenta: Fortunately, or unfortunately in construction, there is no one solution or technology that works for all buildings or projects. So, the approach for us has always be one of 'Horses for Courses'. Import of technologies from the West has long been used and has often paid rich dividends as construction quality and speed improves. We continue to use various forms or shuttering materials, which tend to provide better quality and ease of work. What will be crucial to take the use of technology in construction to the next level will be the training of skilled labour to manage the technology and get the best use out of it. Further, I still think there is tremendous scope in the use of technology from a project management standpoint, something that we haven't yet been able to tap as a company.

Spenta Corporation

Aditya Kedia, MD,Transcon Developers: We use first-rate construction technologies like safety drill and batching plans. We have a heat pump that is linked to solar panels to maximize sunlight. We use Fly Ash (a Pozzolanic material recovered from gases from burning of coal during electricity production). These micro-sized elements comprise of materials like alumina, silica and iron. When amalgamated with lime and water, Fly Ash produces a cementitious compound with properties like that of Portland cement. Due to this similarity, Fly Ash can be used to substitute a portion of cement in the concrete, delivering some distinct quality rewards. When used in the construction process of a building, Fly Ash concrete provides better-quality textural consistency and sharper detailing to a structure, and improved finishing to the entire building construction process, and reduces bleeding for architectural finishes.

In our next project-Fortune 500, we will be using the Flat Slab technique for podiums and Aluminium Formwork for superstructures. With flat slabs for podium we will get more headroom by eliminating beams and Aluminium formwork will save on time. This is because in this technique columns and slabs are casted in one go. Aluminium modular formwork, which has been in use for 20-25 years provides speed of construction and better quality over conventional shuttering. Aluminium shuttering is used for ease of erection and faster de-shuttering schedule. This is a repetitive nature of assembly process, and can be custom-designed to suit project requirements. High-quality components are manufactured to accurate dimensions.

In Aluminium formwork, columns and slabs are casted in one go and generally a 10 days slab cycle can be achieved in this technique. Erection of vertical reinforcement, internal vertical and deck shutter fixing takes a span of 4 days, beam and slab rebar tying, external vertical shutter fixing can be executed within 3 days, while alignment, checking and casting require approximately a days' time. External plaster is not required and masonry work is minimized which also saves the construction time and cost. In this formwork, 3 slabs can be casted in 1 month means RCC work of 56 storey building can be completed in 19 months including terrace slab where as it will take 29 months in a conventional structure. In this system one can save cost of external plaster as well as finance cost due to early completion.

Although it was anticipated that GST will reduce property prices pan-India, we have in fact not seen such a significant impact on the ground. If the stamp duty and registration fees would be subsumed under the GST regime, we would definitely see the overall cost of property purchase come down. GST is definitely reducing developers' construction costs, and bringing transparency and accountability into the sector
Anuj Puri, Chairman, Anarock Property Consultants

However, in Aluminium formwork, if workmanship is not proper, then undulations are visible on the external surface and one cannot change the internal layout because of RCC walls. Large volumes of work are necessary to be cost-effective. The formwork requires a number of spacers, wall ties etc., these create problems such as seepage and leakage during monsoon. This formwork is easy to erect and quick stripping is possible due to V shaped prop head, which enables the beam and deck soffit removed without removing the props. Panels can be reused up to 250 times which makes the system cost-effective.

We do not use the Pre-cast construction method because this system requires careful supervision and more skilled workers. Uniform spacing between beams are required in the structure which can become difficult. Some materials are broken up and wasted during transportation. Moulds are costly and only suitable for mass production.

Transcon Developers

Rakesh Reddy, Aparna Constructions: We believe in using the latest technological advancements to deliver over and above what has been promised. Building Information Modelling, an intelligent 3D model-based process, is something that we use to get insights on how to efficiently plan, design, construct, and manage construction projects. We pride ourselves for being an environmentally conscious company and tools like energy modelling allow us to make our projects more eco-friendly. We conduct energy analysis during the conceptual designs of the building, so its efficiency is integrated into the design.

Every project by Aparna Constructions is designed to maximise natural light, energy and airflow. As part of our eco-friendly initiatives, our projects are designed to include zero discharge, rain water harvesting, solar heating and relatively low carbon footprint. Construction practices encourage reducing, reusing and recycling natural resources. Data also plays a major role in our planning and design. We test numerous designs before they enter the construction process. Policy compliance systems and technology leads to faster project approvals, reduced construction costs and reduced property costs.
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