Anshuman Magazine, Chairman, India and South East Asia, at real estate company CBRE, tells Chanchal Pal Chauhan why the sector is on an upswing in India.
Q. Do you think the realty sector is in revival mode?
Yes, India is among the top three fastest growing economies in the world. Global investors are bullish on India's real estate sector, especially the office market due to the growth trajectory over the past decade. Steady lease rentals and high absorption levels continue to breathe life into the commercial real estate sector.
Q. Will recent reforms bring consumers back?
The government has made concerted efforts to bring back both consumer and investor confidence. The infrastructure status to affordable housing is attracting interest from developers in the segment. Besides, the Real Estate Regulator Act (RERA), GST, demonetisation and REIT are resulting in investors expressing a renewed interest.
Q. What are the drawbacks of RERA?
Given that the role of the government approving authority is instrumental in the success of the regulation, its exclusion from the ruling may create issues. While the fine print on the clauses of the Act are not yet out, the final decision on the timelines of project completion are dependent on the benchmark being used to review the same. If it is the original builder-buyer agreement, then there could be a penalty imposed on the developer for any delays.
Q. How will GST affect the sector in the long term?
GST could revolutionise India's warehousing market. By bringing all goods and services under one tax regime, supply chain efficiencies will increase, costs will come down and delivery timelines will improve. Corporates are expected to consolidate and we will see an increased demand for larger, better quality warehouses thereby providing an ideal platform for the emergence of large-scale nationwide players. It will encourage large global players to enter and invest in this emerging market.