2017 has been an eventful year as the landmark Real Estate Act (RERA) came into force with a promise of protecting the rights of consumers and ushering in transparency. With this, DLF’s Managing Director Rajeev Talwar shared what’s in there for the real-estate sector in the new year 2018. In an interview with BTVi, Rajeev Talwar said that with the RERA and the Goods and Services Tax (GST), all the builders would need to reorient their policies and fulfil their commitments, which they already have on the table.
He further said while maintaining promises (on delivering projects) would be a priority for the real-estate sector, it will have some expectations from the government too. “We may ask for single window clearances, lower interest rates, but we will have to be cautious that we will launch projects which as well within the sight. The time is to do a large amount of homework and then embark upon execution of projects,” Rajeev Talwar said.
DLF last week announced that its promoters have concluded the sale of 33.34% stake in its rental arm to sovereign wealth fund GIC for nearly Rs 9,000 crore. The deal is likely to be a part of the new business model under which the company is planning to move from launch-driven company to selling down old inventory.
“Our business model is changing with this capital infusion. We are not going to be a launch-driven company. We have on our books almost Rs 15,000 crore plus of completed inventory. The next few years our intention is to actually sell down that inventory,” Saurabh Chawla, Senior ED Finance, DLF had told ET Now in December. In late August, DLF promoters sold the entire 40% stake in its rental arm DLF Cyber City Developers Ltd (DCCDL) for Rs 11,900 crore.
Meanwhile, Mahesh Nandurkar of CLSA says that the firm is bullish on the prospects of the housing sector in India and that investors may be on the lookout for top wealth creation opportunity. Interestingly, in its latest research report, Edelweiss too has identified housing sector as the theme to bet on in 2018.
According to the research firm, major growth drivers in the space include India’s low per capita consumption of all home building material products; rising GDP, urbanization, disposable income, nuclear families; shortening renovation cycle due to high real estate cost; and virtually untapped but high potential rural market. Edelweiss is bullish on companies into home-building materials, as it expects government thrust on affordable housing combined with low-interest rates to bode well for the sector.