Apr 1 2018 | Realty Zone

Realty Insights | Q&A with Sachin Bhandari CEO, VTP Realty

Implementation of RERA, GST and demonetization has created a huge impact to the cash flow issue of project finance leading to delayed deliveries of the project causing some of the NBFC’s taking a lead over bank financing. Ever since the execution of RERA, the developers are required to unveil all the project details which have created transparency leading the banks to finance the project. However, it’s imperative to understand that the a major chunk of funds have been allocated to the affordable and mid segment, having said that over a period of time funding for the luxury segment is said to pick up.

Sachin Bhandari, CEO, VTP Realty shares insight with Sandeep Sharma about his organisation, mission, objectives, core competencies, upcoming projects, real-estate trends, demand scenario, affordable housing, project finance, green building development, impact of GST and RERA, and solution to India's burgeoning housing problem. Edited excerpts...

Tell us about your organisation, mission, objectives and core competencies.
VTP Realty is backed by the 30 years young VTP Group, holding a prominent position in supplying best quality raw materials; cement & steel in Maharashtra. VTP Realty is building best – in – class residential & commercial spaces in premium, middle-income and affordable segments, catering to each class of the society. VTP Realty’s values are rooted in customer delight. The company echoes its aspiration by offering homes at the highest tier of the MIG segment. With most of the project offerings and a special focus on delivering customer delight in the MIG segment, we aim to become one of the top 5 developers in Pune by 2020. After sales and CRM being two most imperative aspects we at VTP realty are highly focused on providing the same to our customers. VTP goes to such lengths as organizing and funding society’s cultural events/community building initiatives on site to bring people together and break the ice during the first 6 months. We also stand by our product and pride ourselves on responding and remedying any snagging issues that occur, post possession of the property, quickly and thoroughly. VTP Group has successfully constructed close to 100 projects for Government agencies, infrastructure companies and reputed real estate developers across the country. VTP Realty can be fully relied on for delivering superior quality, transparency and maximum value to the last detail with every property. Present in all prime locales of Pune, the projects range between Rs. 18 Lakh and Rs. 1.5 Cr.

Could you share with us insights about your upcoming projects and the latest real-estate trends?
VTP realty is coming up with two new projects. One is located at Dange Chowk in Pune. The project landscape is designed for modern home buyers who are health conscious and seek a participative lifestyle that can help them to stay active and rejuvenated. Spread across 4.75 acres (19222 Sq. Mt) the project consists of 6 residential towers comprising of 2 and 3 BHK flats along with 20 floors. Keeping in mind the requirements of the customers, the towers are connected with central landscape vehicle free podiums.

The second being VTP One a modern smart all-inclusive 1 BHK smart homes coupled with modern amenities in Kharadi. Located in the eastern part of Pune, Kharadi hosts a high demand for the real-estate segment mainly due to the presence of major IT hubs like World Trade Centre and Magarpatta IT Park along with increased connectivity to nearby areas.

It should be noted that, with the implementation of RERA and GST, along with the governments push for affordable housing the Indian real estate market is set for a revival. The segment is witnessing a steady growth along with changing trends. One of the major shifts in the trends in the real-estate sector is the steady evolution of Co-working spaces. With a rapid evolution in Indian culture, regular office spaces will give way to hybrid co-working spaces. Increase in demand of co-working office spaces would be beneficial for the real-estate industry as it would increase cost efficiency, productivity and enhance employee retention. Considering various factors like rapid shift in the lifestyle of the younger generation, dominance of nuclear families, increase in the disposable income along with affordable housing has contributed to a drastic shift of trends in the real-estate industry. Overall this is an optimistic era for the Indian real-estate industry.

How is the demand scenario shaping up in your stronghold Pune region?
With various reforms and structural Policy changes coming into force, the real-estate segment had its fair share of limelight in the previous year. However with the implementation of RERA and GST coming into the picture, there has been a huge change in means of doing business. The execution of RERA has rejuvenated transparency in the real-estate segment giving confidence to the home buyers. Without any doubts, Pune has witnessed invariable growth as it is the ideal city for investment for people residing in neighboring places like Mumbai, Nanded, Nashik, and Kolhapur & people coming across different cities prefer to invest in pune. The Eastern areas of Pune are now well established, and the social infrastructure is undeniably a realty hotspot with both commercial and residential investment prospects. Another advantage is that the area is located on Nagar Road and boasts of great connectivity with the Pune Airport, Sholapur Highway, Koregaon Park, MIDC Ranjan Gaon, Kalyani Nagar, Viman Nagar, EON IT Park and World Trade center connecting to DP Road and the Shikrapur-Chakan Road which makes it very easily accessible.
 
Do you expect Affordable housing and Rental housing to take off in a big way in FY2018-19?

Affordable market targets the maximum population of India which directly increases the prospects of growth for Indian Real Estate market. With the launch of Pradhan Mantri Awas Yojna (PMAY), Indian Government is aiming to provide “housing for all” by the year 2022. Banks like State Bank of India has raised Rs 20,000 Cr for affordable housing and projects related to infrastructure through long term bonds. Such schemes will help in the successful completion of PMAY and will make big way in FY2018-19. There has been a consistent growth in rental revenues for the property market. Many Indian cities are becoming a hub for students, IT and engineering professionals and boasting of people from all across the country who migrate for better job or education prospects. Taking into consideration the increasing demand, the rental housing market is likely to see and upsurge in in the market. Considering that a number of people do not wish to immediately invest in a new property, renting out a home in these cities will always be in demand. Additionally, there has been a considerable push from NRIs as real estate market provides stable returns and handsome rentals.

Could you comment on the changing dynamics as far as project finance is concerned?
Implementation of RERA, GST and demonetization has created a huge impact to the cash flow issue of project finance leading to delayed deliveries of the project causing some of the NBFC’s taking a lead over bank financing. Ever since the execution of RERA, the developers are required to unveil all the project details which have created transparency leading the banks to finance the project. However, it’s imperative to understand that the a major chunk of funds have been allocated to the affordable and mid segment, having said that over a period of time funding for the luxury segment is said to pick up.

What's your take on making green building development mandatory for all the projects?
I feel green building development can extensively cut greenhouse gas emission and lead to human friendly living environment. According to United Nations, global greenhouse gas emissions estimates are up to 60-80%. Most of these pollutants are generated when energy is used in buildings to keep the houses warm or cool, depending on which part of the globe we are referring to, as well as for lighting and lifts. These shocking figures end up making it necessary to have green building development mandatory for all projects to give a better milieu to our next generations.

What's the impact of GST and Real Estate Regulatory Act, 2016 (RERA) on the real-estate players and the buyers at large?
The real-estate market faced a setback in last 3-4 years. Prices have gone down in certain markets and in some markets the prices have been stagnant. If you consider the market where the prices have been stagnant & if you apply inflation to it the prices have gone down by 15-20% in 3-4 years. So with the cut in GST rate by 4% and coming of RERA into force, this is actually a good time for the investors to start gearing up in the market. GST and RERA have made the real estate market transparent, process driven and consumer friendly. GST has cut down all the extra taxes which were to be paid by the investor and made housing affordable. RERA is responsible to make sure that all the projects are registered under it. If a project is RERA registered that means it be delivered on time and reserves the right of customers. But it is said that RERA might raise the construction price up to 10%.

What's the solution to solving India's burgeoning housing problem?
India’s growing population is leading to shortage of houses. But in the case of urban housing, the houses are vacant mainly because of lack of accessibility. According to the latest census of India, out of the 90 million residential census units, 11 million units are vacant; that is about 12% of the total urban housing stock consists of vacant houses. Government of India has initiated projects to solve these problems; one of the projects is Pradhan Mantri Awas Yojna to cut the shortage of houses. Another such initiation is reduction of GST by 4% making houses affordable which can lead to filling up of vacant houses.



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