As the pandemic has taken a giant leap forward in the way people work with the WFH by becoming a standard protocol for following covid-appropriate behavior around the world for almost 18 months now, Niranjan Hiranandani, co-founder and CEO of real estate giant Hiranandani Group, however, expressed optimism about this growth. of 10% of the GDP will lead to an increase in the need for commercial space.
In a dialogue with Kailashnath Adhikari, during the webcast of the Visionary Talk series hosted by the Platform for Public Policy and Governance Analysis, Hiranandani said that with many people comfortable with the WFH , many would like to continue to do so provided the company is convinced that the operation of the WFH is efficient.
For the company, he said, there will be some benefits that they don’t need office space as people work from home. “But you can’t monitor people as much as you want, other than other factors like connecting with people and starting a business. They find it extremely difficult to tell that there will be good-naturedness and some of the time you will be physically working together. I don’t ‘I don’t think there’s really going to be a WFH that’s going to be a 100% paradigm. Provided companies are comfortable, 10% -15% of people will be able to WFH and the commercial space may experience a drop of 10% -15% and the rest will come back. “
On the other side, he said that unlike before, when people were crammed into offices like sardines, today that has changed. Social distancing, fewer people per square foot and with more space available, in the future there could also be more hub and spoke offices in a city center as few people have enough space for WFH and are very uncomfortable.
To illustrate his point, he told Hiranandani in the next 2-3 years, the group will add 3 million square feet of retail space in the Mumbai area alone. “We are strongly committed to the fact that over the next two years India will grow, GDP will increase, the need for commercial space will increase and most importantly the need for Class A office will increase much more than expected. Moral people ; Indian and multinational sector as well as information technology need office and commercial space, ” he said.
He added that the pandemic has led people to start valuing their homes because before, they had never been able to spend so much time at home. “Today, being stuck at home for over 15 months, they want better quality homes with amenities and surroundings, which has led to a surge in demand for both affordable and upscale housing. With Covid, the requirement for the value of having a good quality home in affordable and premium sections. “
Responding to a question about a huge amount of completed and unsold inventory on the one hand and partly built and abandoned inventory on the other hand spoiling the Mumbai city skyline, Hiranandani attributed the troubled situation to a mismatch between the user’s needs and the actual product in terms of price or size.
He said that while many people can afford a home if it is affordably priced, there is a mismatch between supply and demand and that is one of the reasons this scenario has happened. The apartments that were ready and did not show any mismatch were sold during this period.
Second, he said, when housing does not match infrastructure or price or housing sizes do not meet market demands, you will have problems. When the Parel area with many large mills and other properties started to redevelop, unfortunately no good infrastructure appeared in this area in terms of roads and railways. “When you don’t develop pari passu infrastructure with housing development, there is a problem. Housing cannot be developed in isolation. It needs water, roads, a police station, a hospital, an education center, gardens and all the supporting infrastructure. “
Finally, he said, “projects have stalled due to inadequate funding, funding and other issues that have become more complicated since demonetization. Then ILFS fell into disaster, there were problems with the GST and with the arrival of RERA … and all these things happened, many companies entered into NCLT and had problems in the market . Both NBFCs and ILFS had to stop funding when they went into liquidation… all of these complications created problems with incomplete buildings and construction problems… all kinds of complications continue to reign.
While giving his take on real estate investment trusts (REITs) and infrastructure investment trusts (InvITs) in real estate, Hiranandani said that they are safe investments, that they pay good dividends on a period of time and provide an opportunity for capital appreciation. “REITs will continue to be great investments.
InvIT, he said, would be a hundred times bigger than REITs and offer greater investment opportunities over the next five years and even match REITs over a period of time. Both instruments are very sophisticated.
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