INDIAN REAL ESTATE TRANSFORMATIVE JOURNEY CONTINUES
Historically Indian real estate had been an unor- ganized sector with the absence of uniform laws,limited institutional finance and lack of technology in construction and project management. In last two decades, the there has been a massive shift towards more transparency and efficiency across stakeholders from private, public to government authorities. These changes were accelerated with the introduction of RERA and GSTinfluencing all aspects of the real estate from design and construction quality to legal and financial efficiencies. The following developments of strengthening of regulatory regime and laws saw the financial prudence and due diligence getting stronger across the board. The pandemic was the final shot in the arm that accelerated professionalism and technolo- gy adoption in the sector, further enhancing its transformation to- wards becoming an organized in- dustry. The heightened customer expectations, increased globaliza- tion and the government’s focus on sectoral reforms have been the harbinger of change. Come 2024, as we navigate the dynamic currents of this ev- er-evolving sector, adaptability and readiness to adopt new inno- vations and trends will be the key to success for real estate. THE TRUE ENABLERS OF REAL ESTATE The journey of Indian realty has been nothing short of a roller coaster ride. It saw immense pros- perity and expansion till 2008 fol- lowed by a downcycle during the global financial crisis that lasted till 2013. The recovery in the follow- ing year was again impacted by demonetization in 2016 coupled with the NBFC crisis in 2017. As the sector got over the setbacks and was doing good, the pandemic of 2020 became the spoilsport. Final- ly, from year 2022, the real estate sector has not only had a sharp re- covery but also set records in terms of sales, launches and investments across asset classes. All along, some of the allied sectors continued to evolve through the thick and thin, to address the challenges and to cater to the real estate sector transfor- mations and progress. Apart from the realty companies and players, it was a learning curve for the le- gal, finance, design and engineer- ing professionals. Today, the segments of finance, legal, technology, design, con- struction and sustainability have become the strong pillars of Indian real estate. FINANCE & FUNDING With regulatory reforms has come financial prudence in the sector. The developers are now more vigilant of financial man- agement of the project because of thinning margins. The rising professionalism has increased the confidence of domestic and foreign institutional investors that are finding attractive investment opportunities across asset classes from office & residential to ware- housing & data centres, and oth- ers. The new investment tools like AIFs, REITs and InvITs have now ensured easy availability of funds, bringing big and small retail inves- tors in fold. These financing tools capitalize on technology to chan- nel resources in a systematic way. LAWS & REGULATIONS One reason for the grow- ing confidence of buyers and investors in Indian realty is the strengthening of legal recourse. RERA, apart from bringing trans- parency and accountability in the system has also enabled quicker dispute resolution. The imple- mentation of RERA has boosted consumer confidence, leading to increased investments in the real estate sector. In addition, the implementation of GST has sim- plified the tax structure applica- ble to the real estate sector. The recent changes to bankruptcy codes, amendment to the Bena- mi Transactions Act, gradual dig- itization of land records and the move towards e-governance has significantly reduced property disputes, frauds, and corruption. TECHNOLOGY Taking the forefront of the fi- nancial and regulatory landscape is technology that has enabled the sector to keep in sync with the evolving market dynamics and changing customer behavior. And it is not just the industry or the professionals, even the consum- ers are getting tech savvy, which is ensuring proactive embracing of technological advancements. The tech intervention has helped sector minimize cost and maxi- mize productivity as also stream- line customer experience. From virtual reality property tours and blockchain-based transactions to Artificial intelligence and au- tomated construction, the sector is getting equipped for the future. DESIGN & ARCHITECTURE Not to be left behind, the design segment is contributing to- wards the Indian real estate’s phenomenal rise. Innovative architectural designs cater to the diverse needs of the users, while ensuring a profitable venture for the developer. population. Today, the designers are following the mantra of ‘smart & functional’ to utilize the given space in best possible way through building automation and smart planning. The new-age concepts, technology, and design principles, all driven by the aim to create spac- es that are conducive to a better quality of life in harmony with the environment are making the real estate sector attractive for buyers from India and the world. CONSTRUCTION Supporting the design innovations is the construction technology advancements that are helping the real estate sector to minimize dependance on manual labor, project cost, environmental impact and completion timelines. Construction segment is getting advanced day by day, thereby easing collaboration across various stakeholders, reducing errors and miscommunication, while getting more productivity within limited timelines. Technologies including 3D modeling, printing, scanning, prefabrication, wear- able tech, data analytics, smart sensors, drones and real-time data solutions to improve com- munication between design studio and construction site are just some of the ways construction segment is getting bolder and be- coming integral to the Indian real estate rise in stature. SUSTAINABILITY One sector that has silently played its role in the upliftment of the realty sector has been the sustainability initiatives that are making the Indian real estate a go-to investment for internation- al buyers and investors. The gov- ernment regulations apart, PE investors rank value creation as one of the top drivers of respon- sible investing, and view environ- mental, social and governance (ESG) factors as a significant criterial while buying a real estate asset. In keeping, the home grown Green-rating and certifi- cation organizations are taking all steps to make the streamline eco-friendly development processes while, green building ma- terial manufacturers are scaling up their productions to get rid of the tag that eco-friendly products cost more. Sustainability is going mainstream in Indian real estate and becoming attractive to global buyers. In conclusion, there is no doubt, Indian real estate growth story is shaped by resilience, sustainability- ity, technological innovation, and policy reforms. There are many other unsung fields of indian real estate that are contributing to making it an industry at par with global standards. As we step into 2024, the Indian real estate transformation journey continues. NEW YEAR EXPECTATIONS 4The financiers are now advisor and enablers, working hand in hand with the realty firm to ensure the projects get completed on time. From emphasis on due dilligence to risk-sharing mechanisms, the critical role of financiers is undeniable in Indian real estate growth story. The strengthening of legal and regulatory mechanisms with favorable changes has made Indian real estate transparent, accountable and efficient. The laws and regulations are creating a collaborative ecosystem not only for customers, but for all stakeholders. From property & marketing technologies to finance and construction technologies, the digital tools have made real estate sector agile and well-organized. Technology is touted to be the gamechanger for Indian realty as it ushers in a new era of possibilities. The rapidly evolving building design and architectural space is keeping up to catering to the various needs of the buyers and the developers from affordability to consumer-centric planning. Tech tools are adding to the efficiencies that are boosting the project management and quality of the projects. In the current environment of rising inflation and higher prices for raw materials and skilled labor, real estate construction costs have increased dramatically. The construction sector with its improved avatar is aiding real estate by bringing cost and production efficiencies at every stage of the construction process to give customer quality and timely delivery. With each passing year, more companies are adopting ESG standards and investing in assets that comply with the environmental and ethical credentials. With sustainability being part of the business model, the Indian real estate can look forward to increase in sales not only from Indian buyers but global investors as well. TODAY, THE SEGMENTS OF FINANCE, LEGAL, TECHNOLOGY, DESIGN, CONSTRUCTION,AND SUSTAINABILITY HAVE BECOME THE STRONG PILLARS OF INDIAN REAL ESTATE. The Year 2024 Is Uniquely Placed Year 2024 is at a crucial juncture as it could be the starting point of great things to come. The social and economic toll of the pandemic has been absorbed and addressed. Year before has already set in motion the socio-economic recovery and has set the ball rolling. This year, the country as a whole and the real estate sector in particular can build upon the resilience of the past and strengths of the present scenario to shape a bright future.
Tags : stakeholders private public economic pandemic SEGMENTS OF FINANCE LEGAL TECHNOLOGY DESIGN CONSTRUCTION SUSTAINABILITY digital tools