Land Cost Should Be Reduced

By GovernanceToday
In Interview
November 3, 2014
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Pradeep Aggarwal, Cofounder and Chairman, Signature Global shared his insight on various issues in real estate sector in an one on one interaction with Rahul Trivedi, Correspondent, Governance Today.
Pradeep-aggarwal

Pradeep Aggarwal, Cofounder and Chairman, Signature Global

What is the prevailing scenario in realty?
Indian real estate sector is on a road to recovery after the recent slowdown in the economy which carried on till the first half of this year. With the formation of a new government, there have been a lot of positive changes in the economic environment of the country which is signaling a development boost in the coming months. Also, the market sentiments have drastically improved over the last few months with the government showing signs of stability and delivery. Right now, due to the ongoing festive season, the market is witnessing a rise in demand for property and thus, new launches and better deals are luring the customers.

Is there the need of a real estate regulator?
There is always the need of a regulator in every sector or industry so that transparency is maintained and work is done more efficiently and effectively. Real estate is one of the largest contributors to the Indian GDP with a high number of transactions taking place each day. Also, this sector has been on the negative side of many customers’ minds due to a few incidents lately and several developers also face the problems of delay in construction and delivery due to untimely delay in approvals and licenses. Once there is a regulator, things would be continuously monitored and supervised, which will help in creating an environment that protects customers’ interest and allow developers to knock regulator’s doors in case of difficulties.

How do you ensure that your brand is not diluted by the channel partners?
We have a thorough process wherein we conduct regular meetings with all of our channel partners to guide them about our projects, work ethics, work culture and this is followed by a suggestion session where practicalities of work are discussed. After these sessions, we all come down to one conclusion which is carried on in a synchronised manner. We also supervise and monitor their activities continuously.

Is there any surveillance mechanism to prevent fraud?
Prevention is always better than cure. Frauds in this sector can easily be presented with two things. One, if a regulator is present then chances of fraud will go down. Second, till the time we do not have such a mechanism in place, it is important that customers need to be educated and be made aware about where they invest and how they should invest. An exhaustive research of the company and its project must be done so that one is completely aware about the true details w.r.t the past, present and future plans. This can be the perfect guiding tool for everyone to escape such mishappenings.

How should an investor crosscheck the claims made by the builder?
One must always go ahead with what is present in black and white rather than oral promises. Every promise that a company is making must be present in some form of authentic document such as a brochure, booklet, catalogue etc. These are the best tools for any investor to crosscheck what is promised and what is delivered.

What efforts you make to complete projects in time?
Being a newcomer in the Indian realty sector, we will soon be coming out with our very first project in Gurgaon. However, we believe for a project to be completed on time, it is important to start on time which requires timely approvals, efficient manpower, flawless project plan and  adequate funding. Once the work commences with all necessities fulfilled, it is just a matter of detailed and systematic supervision and monitoring of activities based on time based targets.

What are the new projects in the offing?
We will soon be coming out with our maiden residential project ‘Solera’ at Sector 107, Gurgaon. Understanding the value of ‘homes for all’, the project will be under affordable segment which nowadays is a rare sight in Gurgaon. We feel that developing affordable housing project in the heart of city like Gurgaon is a daring approach to enter the realty market, but also creates the perfect mix of reliability and responsibility. Located at Sector 107 Gurgaon, Signature Global’s Solera complex will truly be an unmatched residential opportunity. Being developed in collaboration with the government of Haryana, this residential complex will give a new meaning to the term ‘Value Based Housing’. The apartments will be allotted by a draw of lots – making sure that as soon as they are launched, the value of the property, including the retail centre, will shoot up tremendously. Being an affordable segment project; we are planningto offer 1 and 2 BHK apartments with  features like zero maintenance for five years, provision for power and water back up, exclusive children’s play area, picturesque landscaping, state-of-art contemporary construction and architecture and well ventilated apartments  with abundant natural light. The USP: Apart from being an affordable project in the region, it shares a wonderful location and is strategically located with Delhi being just five minutes away; two minutes from proposed metro station, two minutes from Dwarka Expressway, 10 minutes from NH 8 and 10 minutes from IGI.

The festive season was also not able to attract the buyers. What reason do you see behind this?
This year’s festive season has been receiving quite a varied response from the investors with several developers claiming a good response from the market and a few being amongst the poor performers. The reasons being that the market is on a recovery track with most investors building
trust on the government due to their recent good work, and hence not everyonehas resumed investing, thus lesser demand than normal. A good enough show was possible majorly due to the kind of unique offers and discounts presented by the developers this season.

Do you think that reducing the price has become the need of the hour?
Rather than reducing prices, the land cost should be reduced along with cost of raw materials. Timely approvals and licenses, if obtained, also result in time and cost saving. Once these costs come down, overall cost of a unit will be belowand thus, the selling price will be less. Otherwise  here is nothing much a developer can do to reduce prices under such immense competition and less margins.

The number of unsold units is a big issue. How should developers address this?
Inventories pile up when the supply is high and demand is low. Developers need to conduct a good market research and survey of the region before planning to set up a project. The location must have a sound infrastructure available and good civic amenities around. Once the demand and region is understood, then project planning should begin. It should make sure not to develop lots of units which may surpass the expected demand, as again the stock of unsold inventories will pile up.

By what time do you think the real estate sector will overcome this slowdown?
As discussed, the sector is on a road to recovery with lots of promises made by the government and a lot has already started showing signs of positive market sentiments. This will encourage the buyers to invest in  he market and hence, the sector will start meeting the demand which will be an accurate signal of overcoming this slowdown.