"Pune, Mumbai and Bengaluru are very diverse markets, each providing their own set of opportunities and challenges. Of late, Pune has proved to be the most dynamic market in terms of residnetial and commercial real estate uptake, thanks to the growing IT sector in the city. Mumbai and Bengaluru are excellent markets but defined by higher property rates and, to some extent, an oversupply situation. These three markets each require very different approaches by developers, as it is important to understand what drives their property markets - especially in terms of sizes, configurations and price points."
Arvind Jain, Managing Director, Pride Group shares his views with Sandeep Sharma about his company, core competencies, emerging realty trends, sustainable construction, impact of rise in material and labour cost, housing start up index, affordable housing, government initiatives and recommendations to solve housing deficit in India. Edited excerpts…
Could you tell us about your company and core competencies?
The Pride Group is a leading property development conglomerate that is changing the cityscapes of Pune, Mumbai and Bangalore with its bold new designs, high engineering and ethical standards and professional outlook. A leading development firm in the residential space, Pride Group has successfully diversified into commercial real estate and has various Information Technology parks and built-to-suit office space complexes to its credit. Pride Group is also a pioneer in the luxury hospitality segment and is the driving force behind the extensive chain of Pride Hotels across the country.
Established in 1995, the Group has delivered over 10 million sq ft of constructed area, with over 40 million sq ft under construction across various real estate segments. A megatownship in Charoli, Pune’s most promising growth sectors, as well as a Special Economic Zone are part of this pipeline. The Group follows formalized techniques of construction management and a continuous feedback system that rank it among the most efficient development firms in the Indian real estate construction industry. Pride Group is committed to design, develop, construct and market residential and commercial complexes that consistently exceed expectations. The Group is completely dedicated to progressive practices at all levels, and adopts the latest design and construction technologies as well as safety measures as a matter of policy. With a team of 500+ young and highly skilled and qualified personnel, Pride Group is one of the most dynamic real estate development firm in the country. The Pride Group is a preferred real estate partner for local and international corporates, IT and ITES companies, business owners and home buyers.
Could you provide us insight about the emerging trends in Indian real estate sector? How is the market shaping up in Pune, Mumbai and Bengaluru?
Pune, Mumbai and Bengaluru are very diverse markets, each providing their own set of opportunities and challenges. Of late, Pune has proved to be the most dynamic market in terms of residnetial and commercial real estate uptake, thanks to the growing IT sector in the city. Mumbai and Bengaluru are excellent markets but defined by higher property rates and, to some extent, an oversupply situation. These three markets each require very different approaches by developers, as it is important to understand what drives their property markets - especially in terms of sizes, configurations and price points.
How is the response so far in CY2014 for your ongoing projects? Are you planning to launch new projects in the near term?
We have seen a very good response to our offerings across mid-income as well as luxury housing, and also in the commercial realty segment. One of our most important launches this year will be a full-fledged integrated 400+ acre township in Charoli, Pune. This project will be in the immediate neighbourhood of our existing projects at Dhanori and will encompass all the features expected in an integrated township, including walk-to-work options as there is a sizable commercial component included in the overall plan.
What’s your take on sustainable construction and green building development?
Green living and sustainable construction are at their nascent stage in India, but the requirement and viability of these concepts is growing on the heels of increasing awareness about the need to treat the environment with respect. The common misconception that green homes are not feasible in a country where the primary focus of most home buyers is their budget is decreasing. In fact, green homes and office spaces offer significant cost savings even over the mid-term. Moreover, the increasing environmental consciousness among India’s ITdriven youth is causing a yearly increase in demand for green homes of 5-7%. This is very encouraging for developers who are focused on usheing in the Era of Sustainability in India.
Could you comment on how building integrated township can be a win-win situation for all the stakeholders of the real estate sector?
The new development mantra of integrated townships has now become the model of the future, since they take on the task of organized urban planning to the next level. By creating such large ‘cities within cities’, developers of integrated townships are able to pre-empt the degradation of a new location by setting a definite development standard for the area. Thanks to their ‘integrated’ nature, such townships provide their own infrastructure - electricity and water shortages thereby become a thing of the past. The preservation of open spaces as part of a fixed development plan provides the lung space that is so sadly lacking in the inner city. Security in an integrated township is independent of the safety levels of the location itself. High-tech electronic surveillance and security personnel ensure that the entire township offers its inhabitants round-the-clock, year-round peace of mind. Shopping and entertainment facilities have been screened by the developer, and the movement and activities of the personnel that work in them are always monitored.
Thanks to integrated townships, new areas are not subjected to the usually jagged development patterns of the inner city. From the point of both home buyers and property investors, the value of such a location does not need to grow over time - it is locked in right from the outset.
How far increase in building material, equipment and labour cost has contributed to rise in construction cost considering period of last 2-3 years? What is the way forward to control these prices?
Input costs have increased by between 20-35%, depending on the city and its economic environment. I see no solution to the problem of escalating construction costs - and the consequent increase in cost to comsumers - unless the Government makes policy provisions to accord industry or infrastructure status to the real estate construction industry.
The Pilot Housing Start Up Index (HSUI) released by Ministry of Housing and Urban Poverty Alleviation and RBI recently has indicated decline in housing for Kolkata, Bengaluru and Chennai. What’s your take on this index?
The Housing Start-Up Index is a first-of-its kind tool which provides an insight into the volume of housing construction in specified areas during a certain period. It is an important initiative because it indicates where the maximum and minimum housing construction is taking place. This in turn can provide an understanding of the current and future market viability of certain locations, based on whether infrastructure creation is taking place to support the pace of housing construction. It can also help in understanding oversupply and under-supply, and therefore investment potential, of the examined locations.
The stock market is throwing mixed signals and investors are looking forward for safe investment. In the current scenario, do you think real estate as an asset class can be attractive proposition?
In India. real estate will always be an important asset class, since home ownership is the #1 priority of any Indian. This will not change, regardless of period or macro-economic considerations. It is a fact hard-wired into the Indian ethos.
How would you define affordable housing keeping in mind the Tier-I, II and II cities customer? Are you active in the affordable segment?
The definition will obviously vary vastly according to city and even microlocations within a city. Very generally speaking, i would say that a home is affordable if financing it does not exceed 35-40% of a buyer’s annual income. Yes, we are very much active in the affordable home segment, which is in fact one of our most important value propositions.
Which of the realty segment is likely to do well in the short term?
Residential in the short term, residential in the mid-term and residential over the long term.
What kind of Government initiatives can go a long way in boosting the real estate sector growth?
The Government should make policy provisions to accord industry or infrastructure status to the real estate construction industry What is the solution to India’s growing housing deficit? Build more houses in the right price brackets.