Dr Niranjan Hiranandani,
Dr Niranjan Hiranandani, CMD Hiranandani Communities said in an exclusive interview with Construction Times, that we expect government and apex bodies to work in tandem for easing liquidity squeeze, and pump in additional funds to restart the growth engine.
How is the real estate sector placed in current scenario when the demand has slowed and people’s desire to own a new flat subsided on expectations of further reduction in prices?
Indian economy had a system reboot with consecutive policy reforms to bring in the aspect of transparency, accountability and financial discipline. It impacted the real estate with sluggish market sentiments and gradually led to liquidity choke situation. Aftermath of the liquidity crunch, led to consolidation and Joint venture between several industries players who also deviated from residential real estate to other asset class. Pricing game is still very sensitive to the market scenario, economic reforms and global sentiments. The price pattern varies from market to market, player to player and segment to segment. As a result, much of the potential home buyers still act as a fence sitter who has postponed their buying decision. Liquidity crisis looming over for long has caused slowdown in the economy which needs to be revived quickly for continuing GDP growth. Hence, we expect government and apex bodies to work in tandem for easing liquidity squeeze and pump in additional funds to restart the growth engine which is nearing grind halt.
How is Hiranandani handling the situation, since we continue to see new project additions?
The industry has different segments; we continue in the luxury housing segment, again with mixed –used integrated townships model of real estate development. In the segment we operate in, as also the locations – Oragadam in Chennai; Panvel and Thane in the MMR and Powai in Mumbai – demand for the product we offer continues to be positive. We keep altering our product mix to meet the evolving needs of discerning home buyers as also the aspirational home seeker. So long as we read the demand correctly as also provides products to suit those, it should continue to be ‘smooth sailing’.
The company is largely believed to cater to upper middle class and the premium and luxury segment. Which segment according to you holds the future potential and why?
There are two distinct and separate answers to this. Overall, India will see a demand for ‘affordable housing’, and this will grow along peripheral areas of Tier 1 as also across Tier 2 and 3 cities. In Metro Cities, the cost of land and other resources necessary for construction give us a high price point, and in such a scenario, premium and luxury are the segments that make business sense to work in. We have on-going projects where demand is good; offtake is high. Where tweaks may be necessary are creating distinct products for aspirational home seekers as also the discerning home buyer. Rental is another segment which we see having good future potential, given the proposed new rental laws.
What is the current level of inventory for the industry and the company as well?
We now deliver a good mix of ready to move in homes as well as under –construction in ordr to cater different market mix.
What is the kind of investments we are looking at in FY20 and which are the new projects that are coming up?
Across segments and new asset classes in the industry, there are various on-going projects as also projects on the drawing board which call for huge amount of investments. For example, the first Data Centre building we are putting up at Panvel will entail an estimated expenditure of Rs 1,000 crore till December 2019, by when the building should be ready for fit-outs. We have plans for five such buildings in Panvel, as also in Chennai. Similarly, in warehousing and logistics, we will offer an integrated township with light industrial as also affordable housing for the workforce, along with social infrastructure, so our first two such forays, located at Chakan near Pune and Oragadam near Chennai. The company shall keep investing in the growth potential feasible asset class to tap the innovative opportunities.
Which are the new locations company is planning to enter into and into what segment?
We keep evaluating various new segments as also new markets in which we can work as per new trends. We are looking at new locations for Premium and Luxury residential real estate; rental with sub-segments like student housing, co-working and commercial real estate ; integrated township with light industrial, warehousing and logistics; data centres and so on. Apart from existing locations like Mumbai, Thane, Panvel and Oragadam-Chennai; we are working at setting up projects in Pune and Nashik.