CAUTIOUSLY OPTIMISTIC OUTLOOK FOR REAL ESTATE
Mumbai’s leading real estate company, The Wadhwa Group carries a rich legacy of over half a century. Kunal Chheda, Chief Operating Officer, The Wadhwa Group shares his perspective on the realty market and company’s growth strategies.
The Wadhwa Group has always avoided over-aggression, over-trading and has acquired strategic land parcels under asset-light approach. “We will continue with the same approach and are looking forward to acquiring strategic land parcels at marquee locations, says Kunal Chheda.
Talking about the transformations in the company he added, “During the lockdown period, we outsourced a lot of non-core functions, made the organization leaner in an organic way and invested in automation of processes, upgradation of ERP & standardization of reporting mechanisms. Now, flow of data within and outside the organization is much more seamless leading to a single version of truth. It has helped get all stakeholders aligned, achieving quicker financial closure and faster completion of projects. Involvement of all the employees in this process helped in generating grass root ideas and led to higher engagement levels.”
HOMEOWNERS CHANGING BUYING PATTERNS
Post pandemic, customers are looking at buying larger, environment–friendly homes with ample light, height and air. In this backdrop, the Wadhwa Group’s novel concept of home designing called ‘Ventilit’ proved to be the key differentiating factor. Instead of focussing on designing compact homes with lesser ticket sizes to achieve larger volumes, we designed purposeful homes and phased out construction in a way, to achieve faster delivery of apartments in shortest possible time. This helped the Group achieve sales closures worth over Rs 2,000 crs during the last financial year.
RECOVERY IN OFFICE SECTOR
During the pandemic, in spite of the rude shock to vacancy levels due to deferment of leasing decisions by prospective occupiers, the sector has remained resilient from cash flow point of view as the continuing tenants have been paying their rentals on time. This can be validated from the fact that on a collective basis, the 3 listed Indian REITs have seen strong rental collections of over 99% in Q1FY22. We are seeing green shoots of recovery in the small office segment as young entrepreneurs, small investors and IT start-up companies are lapping up these offices in independent buildings closer to residential areas. While vacancy levels are expected to rise further in the short term, we expect re-leasing activity to pick up pace in H2FY22 on the back of higher vaccinations, gradual return to offices and pick-up in international travel.
“Though large number of stuck projects and inherent regulatory challenges may not auger well for driving multi-fold growth in the short term, we are optimistic on the overall fundamentals of sector and demand-supply dynamics.”