BRIGHT PROSPECTS OF REAL ESTATE BUSINESS
The pandemic provided a hidden opportunity in the form of valuable lessons to real estate where the physical interface plays a key role. One important lesson has been to develop resilience by preparing for the unforeseen unfavourable circumstances. The new business approach, companies are taking, involves deployment of technology for speedy, cost-effective & high quality construction, for boosting real estate marketing, keeping supply chains intact, deleveraging operations, better project management and for building green developments. One of the biggest challenge is to keep financial discipline and maintain the financial health of the company, especially when liquidity is a major issue and cash flows have suffered due to lower demand and high inventory. The rising input costs are adversely and the proposed merging of GST slabs of 5% and 12% will increase transaction costs, affecting the affordability. The likely resumption of upward cycle of interest rates due to rising inflation, will pose further challenge. The speedy development of infrastructure and improving connectivity are already fuelling the rise of small cities. The remote working and setting up of satellite offices by the companies will further trigger the growth of tier 2 & 3 cities. The rise of alternate asset classes of logistics, warehousing, data centres, REITs, co-working, co-living, education and health will also be propelling the sector. As the sector becomes more and more organised amidst maturing regulation, domestic and global investments will put real estate on high growth path.
Tags : Pradeep Aggarwal Chairman-ASSOCHAM National Council on Real estate Housing and Urban Development.