 "Gaurav Pandey CEO, Burman GSC")
Despite the slowing real estate sector, Burman GSC, a joint venture between some promoters of Dabur and US-based private equity fund GSC, has readied an investment of up to Rs 5,000 crore for new projects in the next five years.
Burman GSC recently forayed into this market with its first project, The Spectrum, at Gurgaon.
Quite a few corporate houses have entered the realty sector, the latest being the Bharti Group, announcing the launch of a housing project in Faridabad under group company Bharti Realty. Godrej Properties, Tata Housing and Mahindra Lifespaces are the other realty companies of big corporate groups.
“We will focus on the National Capital Region, Mumbai and Pune in the first phase, unless we find a compelling opportunity elsewhere. We will prefer quality over scale but will have the capacity to launchprojects to the tune of Rs 3,000-5,000 crore over the next five years,” Gaurav Pandey, chief executive at Burman GSC, told this newspaper.
Spectrum, a serviced apartment block, forms part of a planned mixed use development, named Gurgaon Spectrum Centre, also comprising high-street retail, to be launched in the second phase. The total project cost is Rs 400 crore.
The company saw a positive response from investors for its first project and half the 250 units were booked within days. The serviced apartments are studios with an area of 663 sq ft each and 1-bedroom apartments of 893 sq ft each, at Rs 9,990 a sq ft and managed by a hospitality company.
Asked why the group was entering real estate in a slowdown phase, Pandey said, “We see this period as an opportunity rather than a problem. “Real estate, especially in metro cities, is characterised by cyclic trends, generally every four to seven years, depending on momentum of activity in the sector and the overall economy. Currently, the sector is highly under-rated and in the next three to five quarters, we see a significant comeback. It is best for any player with strong financial credentials or any investor to enter at the bottom of the curve and take the benefit of the value growth expected in the next few years.”
Overall, the sector has been seeing declining sales and high inventory, plus a cash crunch, with no bank or financial institutions willing to lend. A drop in new launches and delivery blues have shaken buyer confidence and that of investors.
Of the slow market, Pandey said, especially of Gurgaon, that most developers were being cautious, resulting in fewer options for buyers in the primary market. “There is a dearth of good products...Leveraging our strengths and resolve to offer value and deliver quality in the market, we will carve a niche for our brand.”
