Navin Raheja

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February 20, 2015

RICS Real Estate Conference 2015 - Simplicity & Splendor: Two sides of the Property Coin

RICS had organized a Real Estate Conference 2015: Simplicity & Splendor - Two sides of the Property Coin at the Taj Palace, Sardar Patel Marg, New Delhi on Thursday, 19th February 2015. Mr. Raheja was invited as a panelist in a TV debate with the theme: Juggling Act - Striking the Right Balance which focused on the two sides of the real estate coin - 'affordable' and 'luxury' and take into account the demographic, financial,economic and aspirational factors that continue to ensure that both these aspects co-exist in harmony in real estate.

Speaking in the discussion he said that "Affordable and luxury real estate across asset classes doesn't exist by pitting one over- the other, but rather by striking the right balance between the two, where prices are not inflated unnecessarily and are driven purely by demand, land and construction cost and current market trends. It is fairly clear that developers need to cater to different income groups and continually evolve their product offerings with changing consumer needs. Therefore, it remains imperative to strike a fine balance between 'affordable' and 'luxury'. There is an inherent need to create a rational and realistic real estate market that caters to the 'pocket' of buyers across income levels.

Some of the points that were discussed in the debate included if developers are geared up to meet the potential demand for housing across segments especially affordable or mid-income housing, if the key to providing affordable housing lie in the single window clearance mechanism, striking the fine balance between 'affordable' and 'luxury' across asset classes, policy measures needed to be implemented and practiced for raising demands in both these segment, measures needed to create market-centric products that resonate with a customer’s lifestyle and help differentiate (material, features, facilities etc.) in a crowded and competitive market. lf the 97% shortfall of LIG/EWS segment ever get met while there is a ruling for every project to have a percentage of EWS flats earmarked as part of the overall project, would this be enough to meet the staggering demand. Funding in real estate - how will REITs change the Grade-A office market? Is the commercial real estate market geared up to take advantage? Which markets are developers and financers targeting for luxury and affordable projects? Till date some financiers are skeptical of financing real estate projects. What are the common concerns? Are high cost development funds the only way to go for luxury projects? Is the relaxation in current FAR norms really enough to boost real estate development? Will the new FDI guidelines encourage development of smaller projects, especially in urban areas, where availability of land is limited? With no lock-in requirement, will the real estate sector see increased FDI participation? All these questions on funding were replied in quite a pragmatic way by these panelists.

From Left to Right: Mr. Michael Holland FRICS - CEO, Embassy Office Parks & Member, RICS South Asia Board; Mr. Navin Raheja MRICS, CMD - Raheja Developers Ltd; Moderator Mr. Anshuman Magazine FRICS - Chairman, RICS South Asia Board and CMD, CBRE South Asia; Mr. Getamber Anand - CMD, ATS Infrastructure Ltd; Mr. Chanakya Chakravarti FRICS - MD & Head, RE Acquisitions - JP Morgan AMC