A business leader with the desire to rewrite India’s real estate story. Dr. Niranjan Hiranandani is arguably India’s ‘builder extraordinaire’. He is the man credited with changing Mumbai’s skyline. Dr. Niranjan Hiranandani has virtually revolutionized the Indian real estate industry. Team RealtyMyths, in a candid conversation, talked about the current market conditions and tried taking Dr. Hiranandani’s views. Here are the excerpts of the conversation.
The real estate sector, in particular, has been going through turbulent times. Various research reports indicate a steep downfall in the sales. What, in your opinion, are the reasons behind this sentiment drift? How is the Hiranandani Communities handling this phase?
The Indian economy in general and real estate as an industry in particular, have been impacted by the new paradigm, in form of regulatory changes and initiatives of the Indian Government. From a real estate perspective, I see the regulatory changes and initiatives as ‘Tsunamis’, which hit real estate – and hit hard. From Demonetization through RERA and GST, it has been a period when both, buyers and real estate developers were in a ‘wait and watch’ mode. Obviously, sales were affected, as potential home seekers made the shift to ‘fence sitters’.
At another level, the Indian Government is focusing on Affordable Housing, with various incentives and policy tweaks that seek to make things easier for projects in this segment. Overall, real estate as an industry would have preferred the incentives and policy tweaks to be applicable to all segments, since it only focuses on the affordable segment, there is a psychological impact on the real estate developer community which works across price segments and buyer categories.
Our foray into commercial real estate has worked well for us, in January 2017 at Gandhinagar, Gujarat; we completed in record time a commercial tower, Hiranandani Signature while in the last quarter of 2017, we handed over to TCS a made to suit commercial workspace located in Hiranandani Estate, Thane. Brand Hiranandani has created its niche, in terms of creating integrated townships which offer community living in an eco-friendly setting. This is a product for a specific segment of home seekers, and while we too faced the slow-down in the initial days of regulatory changes and initiatives, we have largely been able to carry on – challenging times indeed, but a challenge which we seem to be meeting quite well.
The government brought in many revolutionary policy reforms for the sector, though, barring affordable housing segment, it failed to boost consumer sentiments in the market. Where is the disconnect? Do you think the government should bring in more such reforms, considering there is a general election next year?
There is no connect between elections and buyer sentiment, similarly, policy tweaks and reforms will not result in home seekers making the switch from fence sitters to actual buyers overnight. The new paradigm which the Indian economy and real estate have faced, in terms of the new regulatory regime, created a ‘wait and watch’ situation which in turn, majorly impacted sales across India. The new regulatory regime seems to be positive in terms of enhancing buyer confidence, while the incentives and policy tweaks are directed only at the Affordable Housing segment. From the perspective of real estate as an industry, we would have preferred the incentives and policy tweaks to be applicable to all segments, and there is a psychological impact on the real estate development community which works across price segments and buyer categories. If the incentives and policy tweaks are made applicable to all segments, it will obviously be positive for the industry, as also for the homebuyers across all segments.
As the demand for luxury housing has dipped in the last couple of years, do you think a developer like you should focus more on commercial realty now and why?
We have been in the commercial real estate segment since long, and in the previous year, 2017, we achieved milestones with Hiranandani Signature, Gandhinagar and TCS Olympus Centre, Hiranandani Estate, Thane.
Where is Hiranandani Communities heading to in next 4-5 years? How do you plan to expand your operations? Is Affordable segment there on the cards?
The integrated township model, which offers not just community living to residents but also ‘walk to work and walk back home’ for some segments has been a winner over the last many years, and we do not see any slowdown in terms of buyer interest in the same, across projects in Mumbai, Thane, Panvel, and Chennai. We are diversifying into tourism-themed projects in Alibaug and Khandala, as also industrial townships in Pune and Nashik, and warehousing and logistics projects in Chennai and Pune. Yes, the Affordable segment is ‘work in progress’. We have on-going projects where a segment fits in the definition of Affordable, we are evaluating options for enhancing the numbers.
The real estate sector in India, in particular, is mostly a family-driven business? What are the burdens one has to carry in such business set-ups? Do you think the time has come when the sector should involve more professionals than promoting the family legacy?
Hiranandani Communities has focused on external talent since its inception, and while our Group companies are ‘family owned’, we are not ‘family run’ – we have set up corporate entities which are professionally run, which is among the reasons why Hiranandani’s is among the leading real estate entities in India.