In recent years, there has been a significant change in the Indian real estate market. With the rise in population, there has been more demand for affordable housing, so many redevelopment projects have come up. Renovating, or rebuilding existing houses increases its value and attract potential purchasers, or renters. Renovation is a fantastic method to give outdated structures a new life, modernise infrastructure, and construct contemporary amenities. The process of reconstruction, however may be difficult and complicated with several stumbling blocks and hinderance.
With a market value of $200 Bn, India’s real estate sector is enormous and thriving. A study by Knight Frank India predicts that the sector would grow by seven percent annually and reach $1 Tn by 2030. In recent years, the Indian real estate market has shown consistent growth. The analysis conducted by Knight Frank predicts that between 2019 and 2028, the industry would expand at a CAGR of 14.4%. The need for affordable housing has increased with the number of large cities, which has led to an increase in rehabilitation projects. Although, the industry is plagued by many problems, including lack of high-quality infrastructure, scant technological investment, and constrained access to funding.
When preparing rehabilitation projects, business leaders should take into account the following five crucial factors:
Â
Benefits and drawbacks of redevelopment initiatives
Redevelopment initiatives benefit the real estate sector in many ways. It improves the quality of life by enabling people to reside in brand new and renovated buildings. It contributes to the creation of sustainable environment as new structures are constructed using eco-friendly materials.
Lack of knowledge of the process (legal and regulatory) is one of the main challenges. Redevelopment projects call for permits and licences. Business leaders may find it difficult to manage this procedure. Land acquisition is another problem. In many instances, acquiring land may be challenging and contentious, involving several interests.
Making the best redevelopment project decision
The success of every firm depends on choosing the right renovation project. Executives in the industry must consider factors, such as the property’s location, demand for space in future, and costs associated with restoration.
To determine the viability of the project, a thorough feasibility study is necessary. Market analysis, competitive analysis, and an estimate of the return on investment should be included in the study.
Technology’s involvement in rehabilitation initiatives
Real estate is now different sector due to technology. Using 3D modelling and virtual reality, developers can create a virtual replica of the proposed project and provide a realistic representation of the finished product. By doing this, any design flaws can be found even before the construction starts.
Â
Legal structure
The legal environment for redevelopment projects can be complex, therefore a thorough understanding of rules and legislation is necessary. One significant change is the Real Estate (Regulation and Development) Act of 2016 (RERA), which aims to safeguard homebuyers’ interests and advance market transparency. Developers should ensure that all legal requirements are met for their projects to prevent future legal disputes.
Â
Finance possibilities
Redevelopment projects need significant financial commitments, thus it’s important to look at funding options. To help with project finance, banks and other financial organisations provide a range of financing options, including loans and mortgages. Developers must evaluate their funding options and choose the best that satisfies their needs.
Moreover, rehabilitation initiatives have the potential to transform the Indian real estate industry. Amid rising demand for affordable housing, as well as the requirement for sustainable development, developers should assess redevelopment projects. To ensure a successful rehabilitation project, it is essential to comprehend the legal framework, financing alternatives, and technology function.
(The writer is the Chairman of Global St. Angelo’s Group of Companies.)
