SURFACES REPORTER is India's 1st and only Architecture and Interior Design magazine dedicated to products and materials.

10-on-10 with Niranjan Hiranandani, Co-Founder & CMD, Hiranandani Group and President, NAREDCO West

Niranjan Hiranandani is the Co-Founder of one of the largest real estate groups in the country that is credited for giving some of the iconic edifices. A qualified Chartered Accountant, Niranjan Hiranandani is at the forefront of various real estate organizations including NAREDCO.

After demonetisation, one sector that has taken the worst hit is real estate. The gloomy atmosphere has resulted in poor sentiments and low transactions. However, there are positives as well, as work has been started in many projects which were earlier stalled. No doubt, time is tough but the sector is hopeful for better future prospects. Niranjan Hiranandani is the Co-Founder of one of the largest real estate groups in the country that is credited for giving some of the iconic edifices. A qualified Chartered Accountant, Niranjan Hiranandani is at the forefront of various real estate organizations including NAREDCO and has been actively participating for a number of social causes including drafting the State Policy for Slum Rehabilitation in Mumbai, serving as the board member of the Housing and Urban Development Corporation (HUDCO) and many more. SURFACES REPORTER spoke to Niranjan Hiranandani, Co-Founder & CMD, Hiranandani Group and President NAREDCO West to understand his opinions onthe recent policy changes and the future ahead.

“A perception has been created that prices may drop, and that is a situation where everyone – home buyers and also real estate developers – wait for the other side to make some move. Effectively, I see this situation continuing till end of March 2017, after which I expect sales to pick up.”

1. You have been in the real estate industry since decades. Please throw some light over the transition the sector has undergone during these years?

The transition in India’s real estate industry – positive, in my opinion - has been in sync with changes in India’s economy as also the changing needs of the home seeker. The industry players have implemented changes based on the changed scenario which market demand reflects. The most visible change is transparency in working, increased accountability along with self regulation and implementing corporate work culture, which essentially is all about being even more responsible to customer needs. Enhancing customer delight has been an integral aspect, and to do that, Global Best Practices have been incorporated in the working style and pattern. These are aspects which the industry has implemented; the government is bringing in regulation through RERA, simplifying taxation through GST as also enhancing ‘ease of doing businesses’. These will also impact the industry in a positive manner, and the coming future should witness Indian real estate as more efficient, more professional and technically, work ethics that are on par with ‘global best standards’.

2 What is your opinion on Demonetization impact on the business as a whole and real estate industry in particular?

There is a long term positive aspect, but it also is about short term challenging times for both, businesses as also the buyer i.e. the common man. If the buyer does not have sufficient quantum of new currency notes, the market, across industries where cash transactions are the norm, will witness slowdown in sales. In industries where ‘cashless’ payments are done, be it through online banking or credit/ debit cards or such mechanisms, there will be minor – if any – impact of demonetization. When it comes to real estate, the same scenario will be applicable – as a company, ever since we shifted to full cheque payments, we found customers having more trust and confidence in dealing with us. So, impact of demonetization on our Group companies as also all real estate companies that work on a ‘cashless’ basis will be minimal. Those real estate development companies that tend to have a cash component in their dealings will naturally, feel the impact.

 3. It is usually said that Real estate is the major absorber of Black money and shady transactions. Do you think, with the current government’s steps, there is an opportunity to shed negative image and move towards transparency?

The entire industry is not to be painted in the brush of shady transactions or black money. Over the past few years, corporate manner of functioning which includes transparency and accountability, has been the growing trend, especially among real estate developers in Metro as also Tier 1 and 2 cities. Such companies do not fall within ambit of such perceptions. The largely unorganized segment as also smaller and ‘fly by night operators’, who were ‘flexible’ in terms of accepting various modes of payment, including cash, will be unable to work on the cash payment model. So, the ones that had accepted corporate way of working were already not within this ‘negative image’; the ones that were – will have to make necessary changes, and work in a ‘cashless’ manner. Effectively, the economy is getting a new look and new image, real estate will be part of the ‘makeover’, where shady transactions and black money will not be associated with it anymore.

The entire industry is not to be painted in the brush of shady transactions or black money. Over the past few years, corporate manner of functioning which includes transparency and accountability, has been the growing trend, especially among real estate developers in Metro as also Tier 1 and 2 cities. Such companies do not fall within ambit of such perceptions.

 4. Do you think the election of Donald Trump as the USA President is going to impact Indian economy, particularly when the group is already having real estate projects going on in India?

At one point of time, it was said that if the USA’s economy sneezed, the Global economy caught a cold – I am sure those days are history now. Yes, the USA is a major player in the Global economy and that has the ability to impact India’s economy – for example, if the new US President clamps down on H1-B visas, India’s IT and ITeS industry may face a negative impact, their profit margins will be affected. However, for the Indian real estate, this might translate into less demand for IT and ITeS based requirement for commercial real estate. But, also consider that when it comes to his real estate joint ventures across the world, media reports suggest India has the single-largest number. So, would he want to do something that can have a negative impact on his on-going projects in India?

Donald Trump is a businessman, now he is also the head of state. Effectively, we may see a US President who is also a ‘smart businessman’ – or, we may see someone who is too much of a businessman trying to be a good President – I think time will tell, it is too early to take a call on this issue.

5. What do you think about the real estate growth in tier II cities? Do you think they would be next growth drivers?

Real estate development in Tier 2 Cities gets done at price points which are relevant to those cities. So, you cannot expect the sort of high-end projects with such amenities and facilities to be the ‘new face’

of real estate projects in such locations. Obviously, profit margins are not the same as in Metro or Tier 1 cities, so there is a slower pace of growth in such locations. In days to come, the needs and requirements of customer in such locations will be in sync with customers in Metro and Tier 1 Cities, which is when the economics of such projects in Tier 2 Cities will make sense from a business perspective and resultantly, things will look up. Obviously, this will take time, and as a result, may well end up being the next growth drivers.

6. What have been the impacts of Real estate regulatory bill on the sector in general since its approval in March 2016? Do you think it has deterred the entry of small developers in the industry?

Any new regulation that is imposed on an industry gets an initial negative response; then the positives kicks in and the grumbling keeps getting lesser and lesser. RERA is a good legislation, it has positive goals and the Indian real estate industry welcomes it. A handful of real estate companies were working like corporate entities, but now the entire industry will have to do the same. A few leading companies were working in a manner that was transparent and accountable, and now all will have to follow suit. In that sense, it is a positive. The only issue where we have a grouse is that delays in possession of any under construction structure is usually due to multiple causes, which in turn, are the responsibility of different stake holders. The

Any new regulation that is imposed on an industry gets an initial negative response; then the positives kicks in and the grumbling keeps getting lesser and lesser.

role of bureaucrats in this has been mentioned time and again, but this has not been incorporated in the RERA. So, if delays are caused because of acts of omission or commission on part of government authorities or bureaucrats, the responsibility and penalty for the same, is sought to be levied on real estate developers only. This is not just unfair, but for the smaller players, this may well be the reason to shut shop.

7. Sustainable construction practices and the use of intelligent building materials, many developers talk about but only a few follow. Please comment?

I would go a step further and say ‘sustainable’ has to be right from the planning stage, going through construction to the handover and actual usage stage. Sustainable is simply being in sync with Mother Nature, and adopting eco-friendly methods of construction, using materials through technologies that cause least quantum of damage to the ecology of that location. Yes, it is sad that very few companies actually implement such sustainable methods, but it is growing and I am sure, other companies will also do so. We have been creating sustainable real estate projects, and the advantage is also to be seen in form of lower power and water bills for the end-users, as also optimum utilization of space within the construction. We look forward to others joining us in this aspect of sustainable construction.

If delays are caused because of acts of omission or commission on part of government authorities or bureaucrats, the responsibility and penalty for the same, is sought to be levied on real estate developers only. This is not just unfair, but for the smaller players, this may well be the reason to shut shop.

8.  Commercial real estate, particularly the office market has seen a downward trend overall while there has been a significant increase in the warehousing segment due to the advent of online marketplaces like Amazon & Snapdeal. Please comment?

Commercial real estate has done well in past few years. In western India, we have on-going projects in Ahmedabad, Mumbai, Thane and Panvel. At all four locations, our sales teams have performed well, we have witnessed increased demand for office spaces given corporates’ desiring to grow, consolidate and relocate. We also have an on-going project at Oragadam, Chennai - here too

If delays are caused because of acts of omission or commission on part of government authorities or bureaucrats, the responsibility and penalty for the same, is sought to be levied on real estate developers only. This is not just unfair, but for the smaller players, this may well be the reason to shut shop.

demand for commercial real estate is good. Warehousing has been posting positive growth trends, and like other segments of commercial real estate, we foresee growth in all these.

9. Please suggest the major trends in real estate in the current time?

Given demonetization, the media-created perception at present is that customers are waiting for the real estate developers to make the next move. A perception has been created that prices may drop, and that is a situation where everyone – home buyers as also real estate developers – wait for the other side to make some move. Effectively, I see this situation continuing till end of March 2017, after which I expect sales to pick up. Families need homes, you can’t live in a leave-license home, shifting once every 11 months  forever – the positive will come from home loans, reduced interest rates will translate into lower EMIs, that will be the trigger that will result in sales picking up after March 2017.

10. What is your message to upcoming developers?

Build for the end-user, plan so that it fits in with requirements of the family that will make it their home. A good quality product at a reasonable price always finds buyers. The present-day home buyer in India is smarter than the previous generation, so you can’t create homes like the previous generation of real estate developers used to build. Adopting Global Best Practices is a must, and ensuring customer delight the only way to grow.

To keep updated with latest news subscribe to our newsletter
To receive regular copies of Surfaces Reporter Monthly issues subscribe here
Like us on Facebook 
Follow us on Twitter

About Surfaces Reporter

Surfaces Reporter is India’s 1st magazine specialized on “products & materials” for architecture & Interiors! The prime objective of Surfaces Reporter magazine is to contribute positively to the Indian material industry, with unbiased information & awareness initiatives.

Surfaces Reporter magazine has a clear & niche target group comprising of Architects, Engineers, Builders, Interior Designers, Manufacturers, Celebrities, Showrooms, Consultancy firms, and Leading Business houses, Hotels & Restaurants, and PMCs etc. If you have a Product or Project worth publishing in Surfaces Reporter, please email us hello@surfacesreporter.com or you can also submit your project online.

Like Surfaces Reporter on Facebook | Follow us on Twitter and Instagram | Subscribe to our magazine | Sign Up for the FREE Surfaces Reporter Magazine Newsletter

Post Your Comment




top stories

A 65 meter-long public ‘sofa’ designed by White Arkitekter has now become a cynosure in the Uppsala’s Forumtorget square.

White Arkitekter Transforms a City Square in Sweden with 65-Metre Outdoor ‘Sofa’

A 65 meter-long public ‘sofa’ designed by White Arkitekter has now become a cynosure in the Uppsala’s Forumtorget square...

The greatest of all Holy books have been printed in a new single printing of Srila Prabhupada’s Bhagavad-gita; as it is dubbed by ISKON, “The Astounding Bhagavad-gita,” which measures 2.80 x 2.00 meters (9 x 6.5 ft) and weighs 800 kgs

The Astounding Bhagwad Gita, Unveiled by Prime Minister Narendra Modi, Printed in Milan

The greatest of all Holy books have been printed in a new single printing of Srila Prabhupada’s Bhagavad-gita; as it is ...

Though vertical farming isn’t a far sought dream now, it’s about time the concept should be made commercially viable. The good news has it that Precht, an Austrian architectural design firm.

Now Residences Will Grow Their Own Food, Says Precht

Though vertical farming isn’t a far sought dream now, it’s about time the concept should be made commercially viable. Th...

More Stories