By: Sachin Sandhir, MD, RICS South Asia
Track2Realty Exclusive: Now that some progress towards bringing in real estate investment trusts (REITs) has been made it paves way for a positive investment climate in the country. The decision to allow listings of REITs in India as an investment product will boost the liquidity situation of cash starved developers, who are struggling to find funds for their construction activities.
This would also help boost the subdued investor sentiments in the country. While REITs will provide investors an investment avenue, which is comparatively less risky than investing in under-construction properties, implementation will also give them easier exit routes along with regular income in terms of returns.
While India has seen some progress in the form of bringing laws such as the recently notified land acquisition Act and the Benami Transaction Act in the past, the pending proposals will no doubt protect customers and create more transparency in the property market.
There is reportedly low usage of Information Technology (IT) in the sector, especially due to the presence of small and medium enterprises. Additionally, a plethora of problems exist — lack of incentives, and general apprehension about IT implementation. Real estate development is an information intensive process.
In real estate development we integrate diverse and specialized intellectual resources and expertise; and thrive on the creation of project delivery networks based on alliances between participants from contractually-bound multiple organizations. Timely information availability and sharing can therefore, significantly improve operational efficiencies leading to reduction in project time and cost overruns that we currently face.
Use of IT-enabled tools and designs to construct can help the industry to eradicate a majority of mistakes and inefficiencies in the building processes. However, the response towards adapting these technologies is slow. Hopefully, in future the industry will embrace the modernization completely and create a platform for transformation on the basis of these innovative methods.
It is therefore imperative that reforms be brought at a fast pace and in sync with overall market requirements. Reforms will bring back consumers in the market and would instill greater confidence among investors.
