Real estate has emerged as a mainstream investment asset class and it will continue to be. It is a top to bottom approach; if it has to be a win win situation then builders need to understand that quick completion of the job also means faster returns on investments
Bijay Agarwal, MD, Salarpuria Sattva Group shares his views with Sandeep Sharma about his company, core competencies, realty trends, market scenario in southern region, real estate as investment class, price correction and recommendations to solve housing deficit in India. Edited Excerpts...
Could you tell us about your company and corecompetencies?
Founded in 1986, the Salarpuria Sattva Group has grown into one of the most trusted builders in the country today. Today it has a formidable presence in Bangalore, where it is headquartered; it is a well-known name in Kolkata, Pune, Jaipur, Vizag, Hyderabad and Chennai. The Group is also planning venture into more cities in the near future.We will soon be launching in Coimbatore too.
With 15 million sq.ft spaces completed and 30 million more in stages of development and planning, the Group is one of the premium builders in Indian real estate market. The Group’s unwavering adherence to quality has given it the “trusted” tag among builders in the country.
CRISIL- a global analytical company providing Ratings, Research and Risk & Policy Advisory services has given an “A Stable ” rating to the Salarpuria Sattva Brand. This is a top notch financial rating amongst realtors in India by an independent international rating agency. The group has also won prestigious awards including ‘The CNBC- AWAAZCRISIL- CREDAI Real Estate Awards’ for the best commercial and residential projects in India.
The Salarpuria Sattva Group has always strived to set the highest quality standards. It has a customer centric approach and a robust and advanced approach to engineering. Since inception it has had a high commitment to the environment and uncompromising business ethics. People come first in this enterprise. It has timeless values and transparency in all spheres of business conduct.
Could you provide us insight about the emerging trends in Indian real estate sector?
The real estate sector in India has come a long way from being dominated by a handful of players in the 90s to an expanding base of developers, investors and global stakeholders buoyed by the growing construction industry in the country.
The industry has gone through few policy reforms and we may see some more to happen in the coming days. Technology and green practices is the key to drive efficiency and take the sector to the next level and many developers are now using this.
How is the market scenario shaping up in your strong hold i.e. Bengaluru and Hyderabad?
Bengaluru is a mature market with moderately stable prices due to consumer demand mainly due to the presence of the IT sector. It also has a whole lot of other sectors like health, education etc that’s driving its growth. Climate wise, people from all over India are attracted here. The demand will remain steady need-based and steady here. We are in the premium segment- and we see the demand in this segment growing at a steady pace annually.
Hyderabad, on the other hand, is currently weighed down due to the political turmoil but we believe that as soon as this gets over Hyderabad will surpass other Indian cities and emerge as a favorable investment destination. We are very positive about Hyderbad and are looking at 10million sft of construction in the next 5 years.
How is the response so far to your upcoming projects in Pune and Kolkata?
We have been a much known name in Kolkata for a long time, the market condition in both these cities are favorable but need more push in terms of investors.
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?
Real estate has emerged as a mainstream investment asset class and it will continue to be. It is a top to bottom approach; if it has to be a win win situation then builders need to understand that quick completion of the job also means faster returns on investments.
What’s your take on the housing stock situation in Tier-1 cities? Do you see price correction in the near term?
Real estate market is very dynamic and changes as per geography; you would see that Bangalore is a stable market as compared with a Mumbai or Delhi, whereas Mumbai market is currently facing extra supply resulting in vacancy and motionless results. We are optimistic that in some quarters the price correction will occur.
How far increase in building material, equipment and labour cost has contributed to rise in construction cost considering period of last 2-3 years?
All this add up to a susbstantial increase. It is not only difficult to get labour but costs for wages have more than quadrupled. From cement to equipments and availability of materials – cost have gone up substantially.
What kind of growth is expected in the residential real estate segment in the next one year?
Real estate industry in India will grow steadily, with many new properties announced by us and other developers we see this space will continue to keep its momentum. We do expect the pace will be different in different geographies.