‘Bengaluru developers are experimenting with trends; bringing in advanced techniques’


In a freewheeling chat, JC Sharma, VC & MD, Sobha Ltd, shares his vision of how Bengaluru can lead the way for innovation and end-user engagement

JC Sharma, vice-chairman and managing director of Sobha Ltd, has been witness to the emergence of Bengaluru as the country’s top realty destination. It is not just the business potential of the city that makes it an investment magnet. Rather, there are real-estate related catalysts, like the developers’ focus on end-users, innovation with the product, and adoption of advanced technology that makes Bengaluru the numero uno of Indian real estate. Often referred to as one of the best CEOs in the business, Sharma believes that sentiments may be affecting the growth of the business, and the Indian property market is not heading towards correction.

 

Q: What makes Bengaluru one of the best performing property markets in India?

A: For the last few years, Bengaluru has remained the most happening city as far as real estate sentiment is concerned. The positive growth of the IT/ITeS sector, has resulted in large workforce requirement, creating a big demand for housing needs in the city. According to NASSCOM, the revenues from IT/ITeS sector are expected to reach US$ 300 billion by 2020, while the number of employees in the sector is expected to increase by 2.4 million to reach 5.1 million by 2022. A major part of this growth will emanate from Bengaluru, which will further boost the real estate requirement in the city. Keeping this in mind, many big players are entering Bengaluru with their large projects. Additionally, given Bengaluru’s climatic attraction, high capital appreciation, decent infrastructure and connectivity, the market attracts more NRIs who are opting to settle in the city.

 

Q: Have developers in the city done something differently or are the financial activities and liveability index, organically driving the city property market?

A: The developers in Bengaluru are focussed on end-users. The emphasis is on providing ample useable space with regard to the built-up area in the total saleable area. Moreover, the developers in the city, are experimenting with trends and are bringing in advanced techniques to make their projects more compact, affordable with lots of amenities.

 

Q: However, the stress is quite visible in the Bengaluru market as well. Do you think the city’s property market will sustain the slowdown blues?

A: Sentiments play an important role in the minds of home buyers. When they see negative sentiments in other cities, they also start taking more time to decide. However, we believe that the sentiments will improve and Bengaluru is expected to do well.

See also: ‘As developers, we need to take steps to instill trust among buyers’

 

Q: A lot of developers have liquidity concerns and operating cash flows have taken a hit. Don’t you feel that the lack of funding will force the developers to cut prices?

A: You may be right. Developers today are having liquidity concerns. However, I am of the firm opinion that the real estate prices generally reflect the true value of different cities. The selling of products by reducing the prices cannot be a long-term solution, as it will be difficult for such developers to generate the required liquidity to replace their existing inventory.

 

Q: Bengaluru for the first time, has more than 1 lakh unsold inventory. Will it force the developers to reduce prices, especially when the secondary market transactions are indicating correction?

A: The inventory is not a big concern for most developers. Sobha has launched their largest residential project of approximately 7,000 units in Bengaluru. We, therefore, need to look at inventory from the perspective of those projects which are completed but remain unsold. In my view, most developers do not carry large inventory in completed projects.

 

Q: When and how do you think the sector will come out of the present crisis of confidence?

A: The macro-environment has been improving. Interest rates are coming down. India will be a big beneficiary of the falling commodity prices especially, in the case of crude oil and steel. I am of the strong belief that markets will start improving soon.

(The writer is CEO, Track2Realty)

 

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