With more than four decades of experience in the real estate business, Gera Developers is widely known for changing the landscape of Pune and its surrounding areas. The group has developed more than 50 projects in Pune and Goa. It has recently launched two commercial projects in Pune, along with Goa’s first Child Centric Homes. We got an opportunity to interact with Mr. Rohit Gera, MD, Gera Developers. We talked about various issues and concerns the sector is going through, including the GST. Here is the excerpt of the interaction.
It has been more than one year since RERA came into the picture. However, a lot of ambiguity still prevails over certain issues like allotment of open and common spaces in a society. What amendments do you suggest to make RERA a fool-proof law?
RERA is a new law that has been created to protect the interest of consumers. The law itself has created an opportunity for rules to be redefined if necessary, depending on findings of the first year of implementation. The bigger issue, however, is that the law has not been implemented in many states in this country as yet and a few have even diluted the intent of the Act. This is the bigger problem that needs to be addressed on a more urgent basis. As far as minor tweaks and corrections required in the rules, I am sure proactive governments like the Maharashtra government will certainly keep in mind consumer requirements and needs and make changes in the due course.
As per some of the recent reports, Pune has gradually picked up in the commercial realty market. What are the features, in your opinion, which make Pune one of the better options for MNCs?
Pune is certainly seeing traction in terms of commercial and leasing. This is because of the quality of life as well as the quality of real estate available. The proximity to Mumbai certainly helps as far as multinationals are concerned when it comes to leasing space in Pune.
The government opened 100% FDI in single-brand retail earlier this year. However, apart from IKEA and H&M, we could not see much movement happening in the market. Can you explain why?
The government has opened FDI in single brand retail earlier this year. To expect large retailers to immediately respond by coming up with instant plans to invest in a new country is a little far-fetched. Each of them will first assess and see how the country deals with the first few movers who come into India, thereafter they will make their annual plans and in due course go ahead and implement the same. Nobody at a large scale reacts at lightning speed and certainly not when there are countries where rules do get changed and tweaked along the way. The fact of the matter is that the previous government did contribute to some amount of negative impression when it came to foreign companies and their tax treatment.
Though in some of the recent reviews, the government has reduced GST on some of the raw materials, do you think this is sufficient? How, in your opinion, should GST be implemented in the real estate market so that it can have a bigger and better impact?
The GST reduction on apartments is a welcome move, however, the real cost of GST comes in the input side to the developers. Even if the government made the GST on apartments at the lower cost down to zero, there will still be a GST cost that is borne by the developers which are a cost which will be passed on to the end customer. The government, therefore, needs to rapidly reduce the GST on items which are currently taxed at 28% and rationalize this so that the current average GST of 18% on all construction is brought down to 12%. Only when this happens, will developers be able to pass on benefits to end consumers across segments.
Please share details about your latest and upcoming projects. How is Goa performing as a commercial real estate destination?
Recently we launched 2 commercial projects in Pune, Imperium Oasis in Pimpri and Imperium Alpha in Kharadi, we also launched Goa’s first Child Centric Homes in Goa.
We have a total of 7 commercial projects in Goa at various stages of completion, I would say it is yet a developing market.