Real estate sector which has seen the bottom in last eight years post the Lehman crisis is now again giving and showing positive sentiments. Real estate and construction sector in India is expected to be the third largest globally by 2030 contributing over 15% to the GDP and emerge as the largest employer in India providing employment opportunities to over 75 million people.
Organised Indian real estate demand is estimated at roughly 880 million square feet. It is being projected to reach approximately 1.35 billion square feet by 2020, a 9% annual growth rate. Residential real estate is responsible for 85% of the demand. This growth is supported by robust underlying market drivers such as favourable macro-economic conditions, increasing affordability and urbanization, improved access to credit and the gradual shift from unorganised real estate construction to organised development.
With positive sentiments and recent developments from policy side for the ailing sector, the buyers are back and that is also true for the developers. The cash starved companies which were not able to complete the construction are now working with accelerated pace and momentum to offer possessions and deliveries. A case in point is Emaar MGF, which shall be handing over almost 3000 number of units by end of fiscal 2017. The necessary funds and resources have been deployed for an early completion.
This has been achieved by deploying more than 1600% labourers at various sites as compared a few months ago. Mr. Ashish Jerath, Head Sales, Emaar MGF, “Presently, almost 8000 labourers are working at various sites of the developer, as against 500 in April 2016. The company aims to increase this workforce to five figures in the next three months at various projects including Palm Hills, Palm Garden and Palm Drive in the Gurgaon region.
Emaar MGF has decided to fast track and complete the ongoing projects, like Emerald Estate, Emerald Floor, Emerald Floor Premier, Palm Garden, Palm Terraces Select, Gurgaon Greens, Imperial Gardens in Gurgaon region besides The Avenues and The Grace in Chennai region by December 2017. This will be the highest delivery in several years for the company” added Mr. Jerath.
The company has been able to achieve this accelerated pace post the restructuring and demerger exercise that was initiated at the start of fiscal 2016 with an aim to give the possession to buyers. The testimony to the same is that Company has been recently lauded by the Chief Minister of Haryana for progress of work at its ongoing projects sites. The company has 53 ongoing projects across India and has accelerated the process of completion.
Emaar MGF is the only developer in the NCR region that has deployed such a huge manpower after the recent restructuring of the company. It has been regularly meeting customers to redress their issues besides sharing construction updates and completion timelines.
In fact, average delivery of projects as a percentage of under-construction stock across the top nine cities increased from just 2% in 2013-14 to 9% in the first four months of 2016-17, according to a research report dated 26 July by real estate portal PropTiger.
According to information on the website it will start handing over several projects by December 2016 itself. This would include projects such as The Grace and The Avenues in Chennai, followed by Emerald Hills from December. The company recently received occupation certificates for first phase of these projects this year.
Emaar and MGF are parting ways, and work is expected to further pick up pace after the separation, with Emaar retaining most of the under-construction projects. It is pertinent to note that this reorganisation will enable Emaar to implement the focused strategy for its real estate business in India and will allow the business to undertake future expansion strategies. It will also enable Emaar to drive the development of ongoing projects in India, as the complete focus is on fast-tracking completion and delivery of all the ongoing projects to the customers.