· Ready to partner Government on affordable housing, says Hiranandani
· SBI Chief hopes banks will pass on benefits to buyers
· REIT could be game changer, say experts
The 2-day high level Real Estate and Infrastructure Investors’ Summit 2016 organised by NAREDCO in association with APREA-Asia Pacific Real Estate Association saw intense level of discussion on ways of attracting more investments given government’s focus on housing and infrastructure being the main plank for development of the country and economy.
In his welcome address, Mr. Niranjan Hiranandani, President NAREDCO West and Managing Director, Hiranandani Group said he was stressed on the public-private partnership at various levels – from the Centre to local government.
Pointing out that affordable housing has more potential than can be imagined, he called for simplifying and reducing the taxation to creates millions of houses that a common can buy.
“We support our Prime Minister’s call of Housing for All where there is a need to build more than two crore houses. Developers face hurdles in terms of land, environment and other issues by activists who hamper development and create impediments which contradict the very purpose of affordable housing. We need to create this as a housing revolution, call this our kranti. We can do it, every county in the world is doing it, and India can do it,” he added.
Speaking as the chief guest, Mr. Rajnish Kumar, Managing Director, National Banking Group, State Bank of India said, “Real estate like any other industry has also experienced ups and downs.
Calling for business based on sound principles, he called for time-bound completion of housing projects to check spiralling costs. There is not enough supply of land which is not in sync with demand. The cost of land, transaction fees are all contributing to high cost of property. In India, construction time is very long when compared to the west, due to which finance cost goes up. Hopefully, recent amendments with new regulatory regime, he said, banks will be willing to pass on the benefits to the home buyer. We are the cusp of a revolution change be it RERA but self-discipline is a must for the industry. Our focus must be in finding new avenues in raising funds and completing projects on time,” he said.
Mr. Peter Verwer, Chief Executive Officer, Asia Pacific Real Estate Association ( APREA), spoke on the new drivers of real estate returns in Asia and how India rates. India has access to REITs. Many countries are introducing REIT legislations in their countries. The United States of America took 27 years to get it right, India just 27 months, he said and praised the government for its efforts.
About REIT he said, India’s model is positioned on the Asset management. It is evolving to deliver a broader spectrum of economic and social development.
Mr Gautam Mehra, Leader – Tax and Regulatory, PwC India, said, “Real estate is the second largest employer in the country after agriculture. REITs offer a wide platform for investors to come and invest in. REITs is a new beginning for the real estate and infrastructure industry in India. Affordable housing, smart cities and infrastructure development are all linked to REITs.
Mr. Amit Goenka – MD & CEO Nisus Finance & Convenor of the Summit stated – India is witnessing tremendous international capital draw. This year too we have seen new investors and LPs come to the country seeking opportunities. It is important for the development firms to seize the opportunity, build corporate assurance models and gear up to meet the new regulations under RERA and GST. Transparent, predictable, consumer and investor centric growth companies with corporate brand image are going to be the only relevant players to build the RE sector.”
The two day summit will include panel discussions, debates and presentations on various topics such as India’s infra and real estate sector – enabling policy framework for integrated development, growth drivers for attracting investments, on track for affordable housing and housing for all, Where is the capital headed? India vis-à-vis other emerging markets – global institutional investors moving towards alternatives, new hotspots: social infra, logistics and warehousing, renewable energy, Growth in AIF Funds – impact of new regulations and innovation in structures, opportunities for AIF funds v/s FDI Fund v/s Portfolio management services.
Private Equity (PE) investments from foreign funds in Indian realty sector rose by 33 per cent to Rs 14,974 crore during last year. However there is a huge deficit and if we are to house all citizens by 2022 then it requires an investment of US $ 2 trillion for construction of 9 crore housing units; the present shortage plus additional demand of housing by 2022. The Summit explores ways of bridging the financing gap through partnerships, asset monetisation, role of HNIs and family offices.
The recent passing of the Real Estate (Regulation and Development) Act, 2016 (RERA) is set to boost investor confidence, accentuation more foreign investments into a more transparent realty sector. There has been a surge of demand for non-housing asset classes like commercial and IT/ITES space, retail, hospitality, warehousing and other income producing assets, buoyed by the enabling regulations under REITs.
The Summit will drive the mantras of transparency, predictability, partnerships, uniformity, affirmative actions, long term growth and sustainability in taking India twin sectors to unprecedented heights.