If we look at the civilization and older cities, the urban infrastructure and real estate were one phenomenon M MURALI, Managing Director, Shriram Properties
What is the role of real estate in urban infrastructure?
Real Estate plays a very critical role in Urban Infrastructure. Real estate defines the city architecture, city’s culture and its behaviour. Real estate and the urban infrastructure should go together. If we look at the civilization and older cities, the urban infrastructure and real estate were one phenomena and it was not two different. Urban planning always included the real estate. This is even applicable to some of the latest smart cities like Barcelona, Shanghai, Singapore and even our very own Chandigarh. It just reflects the nature of the people. There are two ways to deal with this - build the city’s real estate based on the nature of their people or define the real estate with urban infrastructure to reflect the nature of the people. Historically, the rulers have used real estate and urban infrastructure to build a better society and to define the nature of their society.
One of the primary aspects ailing the real estate sector in metros is the escalating land prices, what measures can be taken by the government to halt this phenomenon? Are you in favour of a government body/regulation to cap the land prices?
Government should not have any role in defining the land prices is my view. Let us take the example of Hyderabad and Ahmedabad. According to me, the land and real prices will always be fair to the end users and will never sky rocket. It is because of the good infrastructure created by these states in the last ten years. The focus on infrastructure by these two states have not only kept the real estate prices in control, but also helped consumers to have a better quality of life.
Construction and real estate have been very open to new technologies, having said that how fair is the idea to overlook the principle of traditional building methods which forms its basis on green technology?
In our country so far, the technology is catching up very slowly. This needs to change. Our Prime Minister has a great vision of Housing for All by 2022, and for this dream to become reality, new technology is the only solution. We should also focus on making Green buildings and this is the future.
When it comes to the sale of housing units in the Southern India, which state fares better according to you?
Bangalore, because of its natural advantages as a city despite its huge problems on its infrastructure development. Chennai has once again lot of natural advantage because of its industrialization and higher level of literacy rate. Hyderabad follows these two cities. Having said this, the infrastructure that has been created in Hyderabad and the Government’s vision plan for the next 20 years are incredible. If Bangalore and Chennai do not give focus on its urban infrastructure, they could lose out to Hyderabad in the next five years.
A good deal of emphasis has been given on development of new cities how will this act as an opportunity and at the same time what are the inherent challenges which needs to be looked at?
Any development needs to be inclusive which is very important for its sustained growth. It is just not the infrastructure development, there needs to be employment generation for its long term sustainability. The infrastructure growth offers short term employment opportunities and unless we create long term employment opportunities, this will lead to speculation or such cities would fail.
In our constant interaction with architects we have encountered the fact that the master plan of the city has to ensure economic sense to its inhabitants by the way of jobs and opportunities, real estate being a major player in the scheme of urban development, how do you feel this can this be achieved?
Once again, our Prime Minister’s vision of Make in India can bring solution to a major level. We may have to focus on industrial and agricultural development for our long term sustainability. While creating the city design, we need to keep these two factors in mind.
The role of FDI in real estate has to be clearly understood, how will it facilitate in the creation of affordable housing, please elucidate?
I would divide this into two parts. One is affordable housing and the other is Housing for All. What is most important for our country now is Housing for All. Only this will uplift our society. For us to make this Housing for All to come true, we need affordable long term capital. It can be through FDI or ECB or even long term bonds. We need to look at various options of making cheaper funds available for this sector.
The key consumer pattern in the cities experts believe is shifting towards rentals since more and more properties are becoming expensive, are you in agreement with this outlook, if yes, what more can be done to ensure that the trend to purchase continues?
Indians believe in owning homes and this act as security to them. Hence I doubt whether rental housing can be a solution. Also given the yield Vs cost of funds, it may be difficult for rental housing to become successful. This can become success when the gap between the yield and cost of funds reduces. For the real estate not to become expensive, we need to focus on infrastructure growth.
How will RERA and GST make a difference to the real estate market in India?
RERA will bring down the number of players in the industry on one side and on the other side will have few good quality players. RERA will discipline the industry. But for the RERA and the industry to be successful, there needs to be some correction on the current RERA bill. GST will also help real estate growth in long term, but in short term the cost is likely to go up marginally.