I am looking forward to RERA as its going to have its benefits to both developers as well as the buyers. With RERA coming into force this sector is going to see a great deal of transparency and accountability which has been a dire need for this sector. Developers will get all necessary sanctions which will fasten the development process and avoid delays. The act takes within its regulatory functions, the construction, sale, management and transfer of a building, an apartment or a block.
Rahul Shah, CEO, Sumer Group shares his view with Sandeep Sharma about his company, upcoming and ongoing projects, challenges before the real estate sector, emerging realty trends, impact of demonetization, project finance, affordable housing and opportunities for realty players in smart cities development.
Could you brief us about your company's footprint in the real estate sector?
Sumer Group was built on the vision of my grandfather, late Shri Sumermalji H Shah. Sumer was established in 1965, with a vision to build landmarks where people can build the milestones of their lives. It is this vision that has seen us become one of the leading real estate developers based out of Mumbai. We have been involved in significant landmark projects across Mumbai, Alibaug, Indore, Pawna and Goa. With 30 million square feet of development under our belt, and a further 5 million square feet soon to be developed, Sumer Group is here for a long run.
Brief us about your ongoing and upcoming projects in the residential and commercial segment?
We are largely into residential space. Right now, we have upcoming projects in Alibaug, Pawana and Goa. In Mumbai, we have developed the largest slum rehabilitation in Asia at Sangharsh Nagar, Chandivali. Also, our flagship tower of Sumer Trinity Vertical situated in Prabhadevi is under construction. We have JV projects with Radius Developer in Mazgaon comprising a 10 acre development that has residential and commercial center planned namely Harbour center and Harbour heights. Santacruz has a high end premium project: Avenue 54. The work on this project is in full swing.
What are the challenges before the real estate sector in India? Do you think Single Window clearance system can fast track realty projects?
One of the major challenges faced by the real estate sector today entails number of clearances/ approvals required to be taken thereby delaying the entire project execution. Single Window Clearance can fast track realty projects as it will avoid bureaucratic delays. Apart from this some other challenges include increased input costs and lack of transparency.
Could you provide us insight about the emerging real estate trends and property market in Mumbai?
As we saw in the recent budget announcement, the major trend that will be seen in property market is increased focus on affordable housing thereby benefiting thousands of homebuyers. Assigning infrastructure status to affordable housing projects can facilitate higher investments, in line with the government’s aim to provide housing for all by 2022.
How far demonetization has affected the real estate sector?
Demonetization had a momentary impact on the real estate sector. The ban of old currency notes did create a downbeat impact on the resale market, since most of the transactions in the secondary market have a cash component involved. But the primary real estate market did not feel much of the heat since most of houses are sold on bank finance. Apart from this with the reforms that the government has planned like RERA, market is expected to bounce back quickly.
Do you find adequate project finance for funding real estate projects?
When the project execution valuation and market expectation have a good ROI one will find investors funding real estate projects. With FDI Investments being announced to Rs 1.45 Lakh crore for 2016-17 for the first half there will be a keen interest developed within the investment funding fraternity.
Whether you have adopted green building development?
All our projects/buildings are in line with government norms
What can be the impact of Real Estate Regulatory Act, 2016 (RERA) on the real estate companies and the buyers at large?
I am looking forward to RERA as its going to have its benefits to both developers as well as the buyers. With RERA coming into force this sector is going to see a great deal of transparency and accountability which has been a dire need for this sector. Developers will get all necessary sanctions which will fasten the development process and avoid delays. The act takes within its regulatory functions, the construction, sale, management and transfer of a building, an apartment or a block. The real estate project which is the focus point of the act means development of land for construction of a building or building consisting of apartments or development of lands into plots. This brings about transparency and clarity on all aspects of construction amongst both entities.
Is there any hope for common man to buy home at affordable rates?
As per the reforms announced by our finance minister Arun Jaitley in the Union Budget 2017, definitely there is hope for a common man to buy a home at affordable rates. The government has also increased allocation under Pradhan Mantri Awas Yojna (PMYA), Tax to GDP ratio is low which will generate more affordable buyers hence with these reforms the common man can look at buying homes at affordable rates.
As the country gears up to develop 100 Smart Cities, what kind of opportunities do you see for your company?
Future presents various options to developers like Land acquisition, development infrastructure hubs; SEZ’s contributing to the overall government mission of housing for all.