At a time when the country is anticipating another threat due to the outbreak of the Omicron virus that may reach its peak in February, the real estate sector looks forward to the much-needed reforms and incentives in the upcoming budget, especially as the sector is the primary contributor to economic growth, says Siraj Saiyed, Director, ARETE Group.
In a exclusive interview with Sanjeev Sinha, Mr Siraj talks about how the realty sector is coping with adversities and challenges in times of the pandemic, and shares his expectations from the upcoming Union Budget. Excerpts:
By and large, how has been the year 2021 for India’s industrial real estate and infrastructure development sectors, especially in terms of investments and new project launches? What were the most notable initiatives or trends that you witnessed during the year?
India has shown a great deal of resilience in 2021 to recover its economic and industrial growth pathway subsequent to the devastating effects of the pandemic second wave. Especially during the second half of 2021, the government’s continued focus on ‘Aatmanirbhar Bharat’ as well as its mission and vision of implementing favourable policy reforms for industrial growth in India have proved to be instrumental in helping the industrial real estate and infrastructure sectors to bounce back and thrive along with a major boost in manufacturing activities and increased tech and digital adoption across various domains.
Notably, this was also the year when the Gati Shakti Master Plan was unveiled by the Government, as well as the Industrial Park Rating System (IPRS) 2.0 was introduced for optimizing overall infrastructure competitiveness. Additionally, the Government had also, in August 2021, announced that it has approved the development of 11 new Industrial Corridors in India as a part of the ongoing National Industrial Corridor Programme (NICP) – which has the potential to act as a game-changer in accelerating industry-led development in our country in the years to come. As we are close to enter the New Year, i.e. 2022, notwithstanding the concerns of the latest Covid-19 variant Omicron, we strongly believe that the core output, manufacturing and overall industrial activities will continue with their sustainable recovery momentum to eventually touch their respective pre-pandemic levels.
Amid the ongoing pandemic, how did real estate sector cope with adversities and challenges? And what kind of innovations or shifts were seen in this period, which you believe will aid the sector’s growth in the years to come?
Despite the ongoing pandemic, with vaccinations underway rapidly, the consumer interest is expected to gradually improve and hence both residential and commercial real estate segments are expected to become the pivotal segments towards economic growth, which will continue to register increased growth and demand through the upcoming one to two quarters of 2022. While residential sales are already witnessing an upsurge across various cities of India, the commercial and industrial real estate segment also has a huge opportunity to bounce back as we enter the ‘new normal’ age in 2022 and beyond; particularly aided by favourable factors such as low mortgage and bank loan rates combined with stamp duty waivers and realistic property pricing – altogether ushering a new era of growth for the new-age, digital-ready real estate and infrastructure sector in our country.
What are your key expectations from the upcoming Union Budget 2022? From the industry side, is there optimism and hope about the Budget announcements?
At a time when the country is anticipating another threat due to the outbreak of the Omicron virus that may reach its peak in February as per experts, viz. also around the time of the Union Budget, the industry looks forward to the much-needed incentives in the upcoming budget, especially as the real estate sector is the primary contributor to the uptick in the economy. The existing tax exemption on housing loans should be raised. Personal income tax could be made easier in terms of heads and filing in the budget. We also expect the budget will further focus on investments in infrastructure and capacity building.
The Gati Shakti Master Plan was launched by the Government this year. According to you, what is (and will be) the role of Gati Shakti and other Government schemes in boosting industrial infrastructure growth in India?
No doubt, infrastructural development is a pre-requisite for the foundation of large-scale economic development. The PM Gati Shakti Master Plan is a state-of-the-art digitally integrated platform that uses technology to make infrastructure related information available to all key stakeholders at various levels — central, state, urban civic bodies and even panchayats, which in turn will enable the implementation of countless projects to get simplified, be more efficient, and most importantly, make them tremendously speedier. We strongly believe that the Gati Shakti Yojana will not only foster infrastructural and industrial growth in India, but additionally bolster the country’s overall economic prosperity. Undoubtedly, this is a landmark step towards enabling progressive economic growth of India. We are excited to see the future unfold as India unleashes its astounding growth potential by harnessing ‘Gati’ (Speed) and ‘Shakti’ (Power) simultaneously and strategically in the years to come
In today’s era of digitization and rapid urbanization, do you believe India’s real estate and infra sector is still lagging behind? If yes, why so, and how could these issues be addressed optimally?
With the increasing pace of urbanization in the country, the realty market of India has been witnessing a drastic change in recent years. In fact, the government also announced the ambitious agenda of constructing 100 smart cities in India to revitalize the urban systems, advance urban infrastructure facilities, optimize quality of life and achieve sustainable and inclusive development. However, sudden roadblocks like Covid-19 made the journey challenging for all industries, including the real estate and infra sector in India. In addition to this, shortage of liquidity, increasing raw material prices, issues with land availability, tedious and lengthy approval processes, are some of the factors which are, of late, worrying industrial developers.
Considering the massive revival potential of the sector, the Government has offered progressive policies to give a boost to the industry – which is a welcome step. In order to boost the economy, the government took initiatives to reduce tax incentives, providing a conducive environment to encourage buyers. The low-interest rates on home loans have invariably increased the affordability factor for potential home buyers. In fact, the pandemic accelerated the transformation that resulted in digital adoption making real estate a digital-first sector. The current industry trends indicate that the future of the sector looks bright whereas the cost of raw materials will continue to impact the multiple touchpoints of the industry. Therefore, affordability, consumer experience-centric approach, self-sustaining properties will be the leading elements for the industry in the coming years, even while prioritizing on digitization and innovation.
ARETE Group has a diversified business presence across various sectors/verticals. What are your growth, revenue enhancement and expansion plans for 2022 and beyond?
ARETE Group’s growth plans for 2022 and beyond will consist of a major focus on expanding and growing our presence and visibility in Gujarat. We want to enable the acceleration of economic growth within specific industrially-developed and potent regions of Gujarat. At our flagship project – Payal Industrial Park in Dahej, Gujarat – we will be facilitating the entry and regulatory approvals for large-scale industries and manufacturing companies. At the same time, we will be also working shoulder to shoulder with key stakeholders in the industrial growth ecosystem to create a sustainable and win-win roadmap for everyone involved in our industrial projects. Whereas at our newly-unveiled Experience Centre at Payal Industrial Park, we will continue to engage and educate our prospective clients by providing them with a first-of-its-kind realistic virtual experience through a screen-based showcase during their project visits (the Experience Centre uses cutting-edge technology to give the industry veterans a realistic demonstration of sustainable Industrial Park and its superlative facilities).
On the other hand, we are planning in the upcoming year to launch a new residential real estate project named ‘Aangan Greens’ in Vapi – which will focus on the affordable housing segment and help in realizing our Hon’ble PM’s vision of ‘Housing for All’. Additionally, we will also be launching a commercial estate project named ‘Galaxy Emporia’ focusing on creating retail destinations in Tier 3 city, i.e. Vapi. Further, ARETE will be looking to fortify our growth in the retail business as well. In the retail sector, our primary focus for 2022 will be to scale our women’s footwear brand ‘Chere’ through enhancing our online/e-commerce presence and hence, bringing the latest in fashion for Indian consumers.