"Land is a major component in housing project, and defines the prices. I think, the shooting up of land prices in Mumbai is restricting the middle-income home buyers, but offers an opportunity to look as an easy option for city like Thane and Pune. The city of Pune has witnessed phenomenal growth in the recent past. The rapid growth of IT and allied industries created a long-lasting demand for houses and therefore, we are looking for a great opportunity for us."
Shailesh Puranik, Managing Director of Puranik Builders Pvt Ltd
shares his views with Sandeep Sharma
about his company, realty scenario in Mumbai, Thane and Pune, imposition of development tax near infrastructure projects in Mumbai, factors affecting the sectoral growth, need for real estate regulator and solutions for India’s growing housing deficit. Edited Excerpts…
Could you please tell us about your company, mission and objectives? How far are you successful in achieving these objectives?
Puranik Builders aims to achieve growth and fulfill interests of all our stakeholders, by providing highest value to our customers, so as to continually exceed their increasing expectations through service orientation, innovations in technology, processes, concern for quality and leverage the potential of our employees. With focused approach, dedication and highest levels of commitment to all our stakeholders, we have been fairly successful in achieving our objective. Our growth in this sector only proves that our stakeholders are happy with us and have much greater expectations from us in the future.
How is the realty scenario in your stronghold? Which segment is hot in Mumbai/Thane/Pune out of affordable / luxury and Why?
Considering the realty scenario in different parts of the country, the scenario in Thane and Pune, which are our stronghold, is much better. Since, the prices in Mumbai are generally very high, home buyers are seen comfortable to the prices in Thane. There is some amount of similarity between Thane and Pune. The availability of land is not an issue in both these towns. Land is a major component in housing project, and defines the prices. I think, the shooting up of land prices in Mumbai is restricting the middle-income home buyers, but offers an opportunity to look as an easy option for city like Thane and Pune. The city of Pune has witnessed phenomenal growth in the recent past. The rapid growth of IT and allied industries created a long-lasting demand for houses and therefore, we are looking for a great opportunity for us. We have our presence in both luxury and affordable homes, primarily in Thane and Pune. In Thane, the demand for affordable and luxury home has been on the same level. As mentioned earlier, this city has been playing an important role to accommodate the new demand for homes, which includes both luxury and affordable. In case of Pune, the demand for luxury homes has been on a higher side than affordable homes. One reason for this is there has been demand for luxury homes from buyers who are seeking for a second home in a tier 2 city. The other reason is there is a demand for luxury homes from the locals who wish to have a bigger home with upgraded quality of homes in order to enjoy a better lifestyle.
What’s your take on the Government proposal to impose 10% development tax on Mumbai projects coming up near the infrastructure projects like metro rail, monorail etc?
The government’s proposal to impose 10% development tax on Mumbai projects coming up near the infrastructure projects like metro rail, monorail is not welcome. The imposition of these taxes will only add to the cost of the project and will create an additional burden on the buyer. There are already series of taxes, including the recently added service tax which the buyer has to bear. At a time when the market sentiments are less motivating, levying of development taxes will create a negative impact for the real estate industry.
Do you see realty prices cooling off in 2012?
The price corrections have already taken place after the turmoil in the global economy took place. We do not expect any more price corrections. In fact, with high land rates and rising material cost, it is unlikely to expect that the prices will lower in 2012.
How was the FY2011-12 for your company in terms of growth and projects announced?
This financial year has been special for us, as we have launched our cream projects in this duration. Our project Rumah Bali based on Balinese landscape theme and Aldea Espanola based on Spanish architecture was launched in this financial year. With new launches and reasonable sales, this year has been fairly good in terms of growth for us.
Of late the real estate sector is not performing to its potential. What can be the factors influencing the sectoral growth?
High interest rates on home loans for buyers, shortage of working capital in the market, delay in approval of projects, inclusion of new taxes, for the realty sector are some of the factors that are influencing the growth of this sector.
Are you looking up to explore markets other than Mumbai, Pune and Thane?
The real estate business is always seen limited to one particular region. We have been very active in the three prime cities of the country with number of projects on each of this city. And we would like to focus our business into these areas and other small cities such as Neral, Nasik and Lonavala etc.
Do you think ‘Single Window Clearance System’ can be implemented for real estate projects across India?
Yes, certainly. In fact developers across the country under the aegis of CREDAI have been insisting for the same. Lack of single window clearance system, the project approvals are being delayed for several months. Many a time, delay in approval resulted into an escalating the cost of the project, forcing both the home buyer and developers to pay more than what they planned. The single window clearance system will also bring transparency in the real estate market.
Could you tell us about any one of your signature projects launched/completed recently?
We launched our project Rumah Bali in January, 2012. Rumah Bali conceptualized on Balinese theme targeted at the fastest growing number of discerning home buyers, who are seeking best of international class concept and construction. Rumah Bali offers home seekers a beautiful landscape along with vivid culture and Balinese architecture within the budget. The new project also signifies 60 years of India-Indonesian collaboration and the launch was announced in the presence of key dignitaries from the Indonesian Consulate in India. Strategically located at Ghodbunder road, Rumah Bali comprises of 30-storyed buildings with 1, 1.5, 2, 2.5 & 3 BHK the residential complex with a peaceful atmosphere filled with contentment to its buyers. It provides the best of the facilities and amenities to meet the changing taste and standards of the present day living. ‘Rumah Bali’, is a combination of the modest design with clean notions of lines and the beautiful architecture. The huge project, with a well-planned layout spread across 10 acres of land enchants one to experience the bliss of Bali by staying here in Thane. Rumah Bali is a unique offering to cater the middle-income group in Thane and Mumbai Metropolitan Region. The project would be constructed in three phases. The estimated completion and possession time of the project is 2015.
Puranik Villa at Kasheli, Thane a gated community of 75 row villa’s has been one of our recently completed project along with Puraniks Zeneeth a mix of commercial and a 16 floor residential tower based out of Mulund, Mumbai a SRA project.
In view of the CCI imposing heavy penalties on some of the cement companies. Do you expect a fall in the prices of cement in the coming months?
Cement is an important element of the realty industry. The levying of penalties on some cement companies may bring in some transparency in the functioning of cement companies thereby resulting in positive correction of prices.
Are you in favour of real estate regulator?
Having a real estate regulator will have positive implications, however there are certain facts that we need to consider in this case. Real Estate Regulator will help in achieving transparency in the real estate transactions. But there are chances; with the addition of this institution it may add yet another layer to the government’s red tapism for the real estate sector.
What’s the solution to India’s growing housing deficit?
There are multiple factors which have been influencing the housing scenario in the country. Multiple agencies for providing approval for housing projects, high land rates, lack of working capital, poor support from government for the overall industry in terms of favorable policies are some of the elements that have resulted in housing deficit in the country. The only solution for these issues is government intervention by bringing in right policies and rules that can motivate the developers to fill in the gap in the demand and supply of houses.