60 years of Indian real estate

Paradigm shift

The Indian real estate sector has grown exponentially in the last six decades, says Shilpa Sachdev


More than 60 years after India became a Republic, the country has seen phenomenal changes. It has gained recognition globally as a major player in the world economy. This is also reflected in the journey of the Indian real estate sector, which has emerged as one of the significant contributors to the country's GDP. 

The country has witnessed a tremendous housing boom, specifically in the last decade. Newer locations have come to the fore expanding the boundaries further. While the metropolitan cities continue to remain in demand, even Tier II and Tier III cities are fast gaining momentum on account of their commercial and strategic viability. On the policy level, liberalization indeed threw open the floodgates of the country's development. 

Surabhi Arora, MRICS, Associate Director - Research, Colliers International says, "The sector started flourishing with India embarking on broad-based liberalization in post 1990's era when various multinational corporates started seeking permission to commence operations in India. Mumbai, being the financial capital of India, was the first city to witness the influx of financial and services multinational companies. By 1997, the real estate prices increased to the point where the companies started looking for cheaper, cost-effective locations and Indian real estate witnessed emergence of new alternative/peripheral business districts in all the major cities in India."

Over the years, the landscape of Indian cities has undergone a great transformation. While the key cities have grown beyond their current potential and are expanding vertically, areas which were earlier categorised as peripheral cities have today become prime areas holding tremendous growth potential. A Kalpataru spokesperson says, "Areas like Thane, New Mumbai, Panvel around Mumbai and areas like Gurgoan, Noida around New Delhi have become centres of trade with excellent infrastructure support like state-of-the-art commercial, retail and integrated township projects offering world-class lifestyle amenities. Also, many other areas within the heart of the cities, which were earlier categorised as industrial or textile mills, have also been opened up for development which is also leading to high-end luxurious projects being launched in these areas."

The housing sector has attracted a lot of demand and appreciation in the last few decades. Highlighting a few important events, Anuj Puri, Chairman and Country Head, Jones Lang LaSalle India says, "The roots of the high appreciation rates on India's property market witnessed during the boom period lie in the reduction of interest rates that the NDA Government instituted after 2001. The very amenable borrowing rates encouraged individuals to avail of home loans to buy residences, where actual property purchase had only been an option for the considerably rich before that. This resulted in a huge demand for quality real estate all over the country post 2003. After March 2005, Indian real estate rates displayed a seemingly unstoppable upward curve."

The scrapping of the Urban Land Ceiling Act was the game-changer but it is yet to see its true implementation. According to Mayur Shah, CMD, Marathon Realty, the housing requirement in Mumbai was never an issue post independence. Smaller housing societies would come together and develop residential buildings until 1976 when the Urban Land Ceiling Act came into force. Shah shares, "I still remember when my dad constructed the first building in Mulund in the year 1972, rates were really reasonable. He was selling a flat at the rate of Rs 51 psf in Mulund. So there was never a housing problem but the introduction of the ULC Act strangled the real estate development in the city. Land got locked but urbanisation continued its pace leading to a massive housing shortage. As a result, the prices shot through the roof. This continued till the year 2008 when the ULC Act was scrapped. But then the backlog was too much to phase out. Today, we have a 1:20 ratio of shortfall where if 20 units are required, only one is built. Infrastructure is still a big challenge. What we need is clear, transparent, speedy and sustainable development."

With time, several changes have been introduced to fast track the sector's growth. Manju Yagnik, Vice-Chairperson, Nahar Group says, "Various reforms by the government such as repealing of Urban Land Ceiling Act, altering FSI rules were the key drivers for the real estate development along with the massive infrastructure development. One must also credit the change that was witnessed within the real estate sector. 


For instance, this sector, which was once dominated by old contractors, has welcomed the arrival of a new crop of developers, who have introduced a professional approach towards property development and international standards of construction. The country has witnessed revolutionary changes in the cities such as Mumbai, Bangalore, Hyderabad and Pune."

Newer technology and a competitive environment have led to the development of a host of new amenities, including township living where everything is available at the doorstep. This has brought a lifestyle shift indeed. Yagnik adds, "World-class health centers, schools, shopping malls, and amenities such as amphitheatres, clubhouses and gyms in the townships that were unheard of until some time ago are now being offered by developers. The competition within the sector has benefited property buyers as many developers today are actively engaging the services of international designers and architects for their projects."
While the sector has come a long way, there is still a room for reforms that will unlock the potential of the industry. 

Shailesh Puranik, MD, Puranik Builders says, "The country has seen a growth rate of 8-9% in the last decade with a 25-30% increase in urbanisation. Allied sectors like materials and infrastructure are also developing as a result. If the infrastructure sector can be given industry status why not real estate? This will facilitate cheaper credit to the industry. ECBs are allowed but they are restricted to a limit. Enough finance is still not available to the sector. The government needs to act as a catalyst and not an impediment. Single-window clearance is the need of the hour; timelines need to be reframed. With different municipal corporations getting established, Mumbai will become one big metropolis in the time to come. We need better clarity and defined policies to sustain the growth coming our way."

As the country's skyline continues to change and redefine itself, there are miles to go. Starting with an industry status for the sector, the clarion call demands for simplification of procedures and systems to infuse the much-needed transparency and boost consumer confidence. Better regulation, best international practices and a professional approach will pave the way forward.


published in Times Property on Feb 2, 2013

Awards for Mumbai developers

Winning Laurels

Awards are pouring in for developers as they choose to bring the best to the real estate industry, says Shilpa Sachdev



The real estate sector has seen a key transformation and as it gets highly organised, a new breed of developers is pushing the envelope in delivering the best of lifestyles to people. And being rewarded for the work done is only a reiteration of the fact that the real estate sector is indeed reaching newer heights.
An example of the changing design dynamics in real estate is the recent award presented to the Lodha Group. The Group has won the Green GOOD DESIGN Award 2012 for its most iconic project World One, the world's tallest residential tower. 

World One is being designed by the internationally acclaimed architects Pei Cobb Freed & Partners, based in New York. The uber-luxurious World Towers will be part of Lodha Place, an 18-acre development at Upper Worli, Mumbai's urbane epicenter.  The towers are designed to be environmentally sustainable, offering exotic configurations that range from exclusive three and four bedroom residences, lavish villas, and luxurious duplex mansions laced with the design genius of Giorgio Armani. 

Talking about the design of this landmark project, Jay Berman, Partner, Pei Cobb Freed & Partners said, "We have designed World One as a unique and iconic response to luxury and sustainable living in Mumbai.  The Green GOOD DESIGN award is an apt recognition for a tower that will define the skyline of this magnificent city, yet become one with the city and its surroundings."

On winning the award, Abhisheck Lodha, Managing Director, Lodha Group commented, "We have strived hard to ensure that this development not only gains from Mumbai's energy but also gives back to the city and the environment around it."

Maintaining its own record, Godrej Properties was selected as amongst 'India's Top 10 Builders' at the sixth Construction World Architect and Builder Awards 2011 for the sixth consecutive year. Their project Planet Godrej has also emerged as one of the winners in the 'Tower Project of the Year' category at the inaugural Construction Week Awards 2011.
Many a times, winning such awards also involves competing with international players and emerging victorious is then an experience to cherish. Talking about their achievements, Vikas Arora, Director, Runwal Group says, "We have recently won an international property award for our project Orchard Residency as the best residential project. Also our retail project R City has been awarded for its mixed use development and also for being the most commended retail mall. Projects across 27 countries were selected and reviewed to choose the best. We have also received the best CMO Award for R City again. All these awards have been awarded at the Asia Pacific level."

In recognition of her immense contribution to the field of real estate, Manju Yagnik, Vice-Chairperson of the Nahar Group, was recently honoured with the prestigious Udaan Sanman - "Business Woman of the Year 2012 Award" at the hands of Chief Minister Prithviraj Chavan. Sharing her reaction on winning the award, Yagnik says, "I consider this as the well-deserved respect paid to all those women who have successfully broken barriers, establishing themselves as leaders in various fields. It also means that women's contribution to business has been recognised yet again that too in a sector like real estate which is considered to be tough and out-of-bounds for women. What's more satisfying is that this particular award is also in appreciation of opening newer career opportunities."

The traditional equation has rather changed as women are increasingly becoming a part of the real estate industry. According to Yagnik, a woman's strength lies in her inborn skills and instincts, which are effectively utilised in the real estate sector. She adds, "Her perspective on lifestyle, architecture and landscaping is positively better and to top this all, her proficiency in acquiring technical knowledge that score high points in the realty industry. Woman has exceptional abilities on creativity, coping with stress, on gaining trust, building relationships and negotiating skills, so essential in this domain. And once she establishes her reputation for competence, it gets reflected not only within the organisation where she works but on the entire industry. And on this count, I am confident that we will soon come across an increasing number of success stories."

The traditional real estate industry is up for a change. Giving the industry the encouragement it deserves, the awards are an encouragement to the new thought process that is changing the perception of the real estate sector in a global context.

- published in Times Property on August 18, 2012