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Last updated: 03 Dec, 2021  

Sapna.9.thmb.jpg Realty sector stepping up its response to sustainable development: Sanya Aeren

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SME Times News Bureau | 03 Dec, 2021

In an exclusive interview with SME Times, Sanya Aeren, Chief Advisor, Marketing & Communications at Berkshire Hathaway HomeServices Orenda India, said that since the onset of the COVID-19 pandemic, the real estate sector worldwide is stepping up its response to sustainable development.

Excerpts of the interview…

Please tell us about entrepreneurial journey of Berkshire Hathaway HomeServices Orenda India.

Orenda India is an Indian start-up in real estate brokerage. BHHS Orenda India marks the brokerage’s first global footprint in India. With our association, we aim to bring a global mindset and global best practices to Indian real estate. Berkshire Hathaway HomeServices is aligned with the best-in class technology platforms to deliver world-class support to its network members far into the future. Our agents will have access to BHHS’ active referral and relocation networks, and its FOREVERCLOUD technology suite, which is a powerful source for lead generation, marketing support, social media, video production etc. We would like to contribute significantly to the development of modern infrastructure in India with top-notch amenities.

 

Our vision is to disrupt the Indian real estate market by providing world-class experience along with using cutting-edge technology following the core principles and values of trust, transparency, integrity and longevity.

What are the reasons for increased demand in real estate?

India has been witnessing a steady demand for housing throughout the country. With the onset of COVID and most organizations taking the WFH route, demand for larger homes that incorporate workspaces has become prominent.

People also want additional facilities such as gyms, yoga rooms, and home theatres to make them fully self-sufficient units. Millennial’s who earlier preferred to rent properties over buying have a changed point of view, and one which is fixed on purchase rather than renting.

Buyers are also looking for second homes that are outside cities. Interested buyers are looking at destinations like hill stations and other holiday destinations. One crucial factor while buying holiday homes is that the house is self-sufficient and well equipped with top class features.

Reverse migration of people from cities to their hometowns has also led to increase in housing demand in tier 2 and tier 3 cities.

There is also a sharp decline in the interest rates of housing loans. Lower rates of interest allow homebuyers the flexibility to raise the loan amount partially thus offering them broader choices of a more luxurious property. This is inclusive of finer amenities and lifestyle facilities in premium neighborhoods.

What is your view on sustainable housing and its future in India?

Since the onset of the COVID-19 pandemic, the real estate sector worldwide is stepping up its response to sustainable development. With an aim to create a sustainable country, people are taking steps such as waste management- use of recycling bins and proper disposal, efficient elevators, smart homes wherein lights should turn-off when no occupant is there in the room, e-vehicles and much more. Smart sensors detecting movement is crucial to make energy efficient buildings by optimizing the lighting, heating, ventilation, and air conditioning. Efficient energy management via smart sensors will help trigger alerts before any issues of repair arise. Tracking and adjusting building systems efficiently will prevent overuse of energy and meet compliance standards. In essences, people are looking for real estate which would align with their sustainability, beliefs, and commitments.

What are the latest trends in the residential and office projects?

Residential: Looking ahead, this time around, the Real estate sector will remain risk averse. Firstly, with controlled cases most rating agencies have not cut down on the prior aggressive growth numbers of India.

Despite the cyclic slowdowns, the structural demand is robust which stems from the rise in disposable income, young demographics, and a large urban centric population. Secondly, plenty of first-time homebuyers are looking out for a home. Similar is the case with households looking to move out and obtain larger houses.

Thirdly, lower housing loan rates further attract consumers and add impetus to the market.

The Economic outlook for FY 2022, looks promising with 360 Realtors view research suggesting an overall positive economic outlook and most rating agencies correcting the forecast GDP numbers in the range of 8 to 9.5 per cent.

The Home Buying Sentiment looks sold at 30.7% buyers looking to buy a home. The 360 Realtor survey suggests that a visible segment in the market is looking to upgrade.

Office: Cities are growing at a rapid pace, which has led to an increased cost of living for both individuals as well as companies. This calendar year, India has seen a rapid growth in unicorn companies, which has led to an increase demand in the luxury projects from the IT and other relevant startup sectors.

As per a real estate study done recently, India’s net office absorption stood at a 4.39 million sq.ft. Specifically, in the Delhi NCR region, a 5% increase has been seen in the net absorption of office spaces.

Following, the new social distancing norms, offices require larger spaces. Also, a hybrid model shall be followed i.e., 15% of the employee strength should be operating from office, 20% from home, and the remaining 65% should be hybrid.

What does 2022 look like for the real estate sector?

The Indian Real Estate market constitutes around 8 percent of the GDP and is the second-largest employment creator after agriculture.

With a workforce of over 40 million directly dependent on the sector, a strained real estate is bound to have a cascading effect on the economy. As per IBEF, the real estate market is expected to grow from USD 1.72 billion in 2019 to USD 9.30 billion by 2040. The ICRA estimates Indian firms to raise USD 48 billion via InVITs and REITs in 2022.

Retail real estate and warehousing segment attracted USD 220 million and USD 971 million in 2020, the office space segment is expected to cross USD 700 million by 2022.

The government is taking several initiatives to encourage sectoral development.

Tax deduction of up to Rs.1.5 lakh on interest on housing loans, and tax holiday has been provided by Union Budget 2021-22. Under Atma Nirbhar Bharat Package 3.0, the government has provided income tax relief measures when it comes to primary purchase/ sale of residential units of up to Rs. 2 crore.

The residential sector is expected to grow significantly with the central government aiming to build around 20 million affordable houses by 2022.

Moving forward, the investment in real estate needs to be backed by long term strategic interest to build a solid foundation for the future.

Government support, industrial sector initiatives and use of technology can play a pivotal role in simplifying the transaction cycle, driving engagement and improving the ROI significantly.

Please share about your future plans?

Our vision is to disrupt the Indian real estate market by providing world-class experience along

with using cutting-edge technology following the core principles and values of trust, transparency, integrity and longevity.

We wish to bring a global mindset and global best practices to the not so organized current ecosystem of Indian real estate.

Our expansion plans are as follows:

South Delhi-Holi 2022

Mumbai- Jan 2022

Bengaluru-June 2022

Geographies under consideration- Goa, Ayodhya, Hyderabad

 
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