Raising the Standards
Gera Developments Pvt. Ltd is a full-service organization with in-house architects, engineers and construction crew. Rohit Gera, Managing Director, Gera Developments and VP CREDAI – Pune Metro gives insight into the Pune real estate market and the company products.
What has been the consumer buying trend in the last few years?
Over the last few years the consumers have mainly been present in the affordable segment. This has led developers to respond by reducing the size of homes and coming up with substantially more supply in the outskirts of the cities where people can buy these affordable homes. In the more recent past customers are finally starting to be more discerning and purchasing under construction homes from reputed developers.
What are the major driving forces behind the growth of Pune real-estate?
The Pune real estate market is supported by a number of factors that lead to strong residential real estate demand. The IT sector, manufacturing, service sector as well as a large number of educational institutions all lead to a strong demand for residential real estate.
I believe Pune was short listed as one of the smart cities because of the overall potential and opportunity in the City as such the delivery of the first phase by demonstrating the Smart City initiatives in one location if done well can serve as a beacon for the rest of the city to follow. This will improve the overall quality of living for citizens in the city as well as lead to additional demand for residential real estate through migration.
But, iimplementation of the Smart City program requires champion from the administrative side along with tremendous political will and support from the elected officials. Without a tremendous amount of cooperation between both sides the implementation of the Smart City programme can be in jeopardy. This to my mind is the single most important factor in ensuring the success of the Smart City program
Developers Initiatives to address the unsold inventories
Individual developers use their own strategies depending on their overall situation. There is no one size fits all solution. In a number of cases developers have actually resorted to launching new projects only as a way to try and get cash flows from the new project so as to sustain the business outflows. In some cases developers have resorted to reducing prices. However it is important that consumers do adequate due diligence especially in cases where they are being offered deep discounts. These deep discounts are only available in cases where there is tremendous distress and there is no guarantee that the money paid by the customer will actually go into constructing the home. More often than not it will be spent to pay the bank so to take care of outstanding liabilities.
Will the industry status to affordable housing attract developers the segment?
Access to low cost capital is certainly a welcome step as far as developers catering to the affordable segment are concerned. At present developers are not permitted to borrow money from banks for land acquisition. This leads to developers needing to borrow money from high cost sources as a result raising the cost of building houses. Given all the new norms and stringent policies and processes now coming into place for the sector it is time that the Reserve Bank modified this policy and permit at least the high credit rated developers to borrow money for land acquisition from banks.
The recent policy announcements like RERA, REIT, GST and their impact on real-estate
RERA will have the single most profound impact on the real estate sector. Thinly capitalised developers will find tremendous challenges especially because pre-launch sales before approvals are now no longer permitted under the new law. Those developers without proper project management systems in place to deliver the project on time will find significant challenge on account of the new compensation clauses contained in the law.
The five year defect liability period will also lead to significant cost impacts for the developers.
Setting aside 70% of the amounts received from customers into a designated account which can only be withdrawn in proportion to the progress of the project will for the lead to compressed yields and returns for the developers and the investors.
These and many of the other provisions will lead to a reduction in the number of projects and number of developers in the market eventually leading to consolidation and the emergence of truce scale for real estate developers in this country.
The distinct features of Gera developments
The four pillars which are the central fulcrum around which Gera Developments as a corporate revolves are Customer Centricity, Innovation, Quality and Trust.
The company’s seven-Day Free-Look Period allows the customer to take back the entire money he has advanced for the booking within seven days if for whatever reason he is not completely convinced with his purchase. Furthermore, Gera has introduced a five year warranty on its homes. This was introduced way back in 2004 before it even became mandated by statutory legislation through RERA.
One of our innovations is the ChildCentricTM homes that cater to the sensitivities of children with product features no sharp corners and rounded edges off the walls to switches at a lower height for the respective rooms within the home. The external environment within the community is complete with Child oriented academies across multiple disciplines which are based on fun, safety, convenience and development.
Gera’s commercial development ‘Imperium’ offers optimized office spaces that have scalability factor interwoven such that every unit can be scaled to a larger space dependent as per the need of the owner. The company has created an ‘Executive Developmental Program’ called LINT (Learning, Inspiration. Networking and Training). It is an annual calendar of events aimed at contributing to the ‘Strategic business Value Addition’ for our commercial customers and tenants.
We look forward to launching five new projects across Pune Goa and Bangalore in the first quarter of the next year. In addition we continue to look for land opportunities for projects for 2018 and beyond.