Leading developers, professionals and private equity leaders discussed varied topics like affordable housing, smart cities and housing regulatory authority and came out with innovative ideas and suggestions to take these concepts forward.
The 2-day high level Real Estate and Infrastructure Investors; Summit 2015 organised by NAREDCO in association with APREA-Asia Pacific Real Estate Association witnessed highly intensive and fruitful discussions on the second day of the summit.
Mr. Manoj Joshi, Joint Secretary (Financial Markets), Department of Economic Affairs, Ministry of Finance, Government of India, was the Chief Guest on day 2 of the summit. He expressed his contentment that Naredco has taken the lead in fostering better economic growth for the real estate sector. This summit has created a perfect platform for an enhanced and more conducive environment for further private equity participation and investments into the realty sector from across the world. This will enhance the confidence of the investors in the real estate sector in India.
On the issue of affordable housing, it was felt that faster the environment clearances, access to capital through equity funding and the concept of joint development by the developer and the land owner can go a long way in increasing the supply of affordable housing stock in the country. Use of technology for faster execution, tax exemption and freeing large parcels of government land were some of the other issues which came up for discussion.
The popular topic of smart cities opened up many innovative suggestions to make these cities a reality. Need for a strong legal framework, coming together and coordination among government agencies like sewage, water supply, environment clearance, forest department and infrastructure and optimisation of land usage will be critical in making smart cities a success. The summit also came out with a view of starting pilot projects as precursors to understand the challenges as well as opportunities in developing smart cities
On the issue of housing regulatory authority, there was consensus among developers, PE players and other professionals that the government needs to take more responsibility rather than only being the controlling power. It was felt that a proper framework needs to be built to protect the interests of all stake holders.
Mr. Sunil Mantri, President Naredco summed up the outcome of the 2-day summit, We are very happy that the Maharashtra Chief Minister has suggested that we should be preparing a blue print for development of the real estate industry and NAREDCO as one of the leading organisation will be happy to take up this responsibility. High level interaction among the global PE players and the real estate developers during the last 2 days only highlights the need to create such forums for positive interaction and further cooperation. NAREDCO will play a catalyst role in fulfilling this need across the country.
Mr. Peter Verwer, Chief Executive Officer, Asia Pacific Real Estate Association (APREA), observed that India needs huge investment to meet the challenge of housing for all and the 2-day summit has given a major kick-start to find measures to meet these challenges.
Mr. Amit Goenka ndash; MD CEO Nisus Finance stated, it is encouraging to note that global investors like Ascendas , KKR, Mapletree, Standard Chartered and others shared their confidence and interest in the long term India Real Estate Story. Notably they have exerted Indian Investors and consumers to repose greater faith and stay put with the sector. It is evident that the surge of capital will continue backing strong asset classes like affordable housing and commercial spaces. However developers need to gear their systems to receive this capital support, consolidate and create a larger leadership position. It also seems imperative that REITs will be launched in the near future.
With the influx of pension and sovereign funds, investments in the Indian real estate sector rose sharply in the first eight months of 2015. Domestic and overseas funds have committed or invested around USD3.2 billion across 54 deals compared to USD1.3 billion across 35 deals in the same period last year. Further, the institutional investors (FIIs) touched a record high with FIIs having invested USD 46 billion in FY 2015, which is ~5.3 times the investments made in FY2014 (USD9 billion).
The two day summit included panel discussions, debates and presentations on various topics such as Foreign and FDI Investors – Opportunities and Challenges for investing in Real Estate in India, InvITs and REITs – Challenges for the Indian market and learning from the other markets, Impact of global economies on India and how India compares as an investment destination, Real Estate in India – Equity and Debt markets, Innovative Financing – Meeting capital needs through investment structures of equity, debt, mezzanine, inventory and other mechanisms etc.
Private Equity has emerged as a major funding channel for the realty sector since the past decade. Post the global crisis of 2008, banks and central bank have taken a hawkish view on real estate, construction and infrastructure credit, slowing down capital availability. Development companies have taken recourse to private equity, NBFCs and other private capital taps to fuel demand and keep up the growth trajectory.
The year 2015 has seen a sharp spur in PE investments on the back of government initiatives for growth of the housing and infrastructure sectors. Targeting the positive market outlook, USD 3,222 million was committed or invested by domestic and offshore PE, pension and sovereign funds in the first eight months of 2015, an increase of 2.5 times from the same period a year ago.
There is a substantial need of private equity injection into the realty sector on back of Government vision for Housing for All by 2022, to supplement India consumption and growth story through the real estate sector. The need for attracting more funding with a view to meet the gigantic task of fulfilling the need of housing for every Indian can be facilitated with large inflow of private equity capital.
The government has initiated several reforms in the recent past including relaxation of FDI norms, focus on affordable housing, establishment of REITs and set-up of development corridors and smart cities.
In light of the above, the two day Real Estate Infrastructure Investors; Summit will primarily discuss issues concerning policy initiatives and foreign investment norms, significant opportunities and challenges that the real estate sector presents, key investment themes prevalent in the real estate sector and India standing as a global investment destination.
About NAREDCO:
National Real Estate Development Council (NAREDCO) was established as an autonomous self-regulatory body in 1998 under the aegis of Ministry of Housing and Urban Poverty Alleviation, Government of India. It is in this year that the Government of India redrafted the National Housing Habitat Policy, giving due importance to the Housing and Real Estate sector, thereby declaring housing for all citizens by the year 2010. The Indian housing and real estate sectors and the allied industries hailed the establishment of NAREDCO, as the apex national body for the real estate industry and visualized it as a single platform where Government, industry and public would discuss various problems and opportunities face to face which would result in speedy resolution of issues. It was formed with the mandate to induce transparency and ethics in real estate business and transform the unorganized Indian real estate sector into a matured and globally competitive business sector.
The National Real Estate Development Council strives to be the collective force influencing and shaping the real estate industry. It seeks to be the leading advocate of developing standards for efficient, effective, and ethical real estate business practices, valued by all stakeholders of real estate sector and viewed by them as crucial to their success. NAREDCO works to create and sustain an environment conducive to the growth of real estate industry in India, partnering industry and government alike through advisory and consultative processes.
About APREA:
APREA is a non-profit body that represents the real estate investment industry in the Asia-Pacific.APREA and its partners help foster a more informed marketplace and encourage greater professionalism by championing best practice across all dimensions of the real estate investment universe.APREA also provides its views to governments in order to help forge a more globally competitive real estate industry.
APREA has chapters in eight countries – Hong Kong, Japan, Singapore, Australia, India, Philippines, Malaysia, and China.For additional information on APREA, please visit www.aprea.asia.
About KPMG in India
KPMG in India is the Indian member firm of KPMG International and was established in September 1993. It strives to provide rapid, performance-based, industry-focused and technology-enabled services, which reflect a shared knowledge of global and local industries and its experience of the Indian business environment. KPMG in India provides services to over 2,700 international and national clients in India and has offices in Ahmadabad, Bangalore, Chandigarh, Chennai, Delhi, Hyderabad, Kochi, Kolkata, Mumbai and Pune.www.kpmg.com/in