 "‘The only way to survive in today’s market is to give on-time delivery’: R K Arora")
About a month after the Supreme Court directive to defaulting real estate companies that home buyers must get back their money at any cost, R K ARORA, chairman of Supertech, talks to Karan Choudhury on the changes in his company to regain customer confidence. Edited excerpts:
What has gone wrong with the construction sector?
There are transparency issues and because of that, there has been a setback, as people have lost trust and that has also led to a slowdown. After implementation of the Real Estate Regulation Act and the Real Estate Regulatory Authority (Rera), things would improve. The Act has defined the role of the developer and the buyer. Without full disclosure on a project, one cannot launch it. Such transparency would bring in a level of confidence in people and in bringing back positive sentiment.
Is Rera unnerving real estate developers like you?
It is a regulatory body, with some guidelines which everyone has to follow. It will be difficult to adopt for every developer, broker and even buyer. Rera would make business difficult for us but things will settle down in due course. A refreshed trust would be created between buyers and developers, as fly-by-night operators and even some of the established players will stop operation. Only people with a good record, who fall in line with the new regulations, would be able to survive.
Also, we (developers) would have to keep (a project's) money in an escrow account and put it into only that project. The good thing is we'd be able to complete the project in time. If at present we are simultaneously working on four projects, after Rera we'd be able to work on only one. Our own contribution in every project will increase, as we'd not be able to divert money from one project to another. Projects being worked on would be less.
Are you approaching the government on Rera, to ask for some changes?
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There are some points we're talking to the government about. It is good that developers have come under its ambit but government bodies should be added, too. They're the ones who have to give the approvals, the completion certificates. Only then can we deliver on the projects.
Do you think the fear of Rera might force many developers to jump ship?
I think many who overnight became developers would vanish. More than 50 per cent of developers would be out from the market. Big and small players included.
Why does the Delhi-National Capital Region suffer the most in completion of projects?
It’s the capital and areas surrounding it. Most of the real estate development happened here and rapidly. I think, cumulatively, projects happening in most of the other regions in India are equal to development happening in this region. The volume of projects was more. So, the difficulties attached to projects also turned out to be more.
What is the status of the court case (against you) regarding non-delivery of flats? What steps are you taking to resolve the consumer pain?
We're giving possession of flats to the buyers. One matter is pending with the Supreme Court, on the twin tower project in Noida (Emerald Court) and we are in the process of hearings. The next one would be this month and we hope some decision would come out soon. We are accommodating our buyers in different projects and have given them alternative property, as a lot of delay happened. We have settled with almost 90 per cent of the people. We hope to clear things in the next two months. When the decision comes out, we will complete the building. The buyers who are still interested, we will give them the property.
Is there any difference in investor confidence this year?
Things have started changing as people have started getting possession of their flats. Investor confidence is slowly reviving. More are opting for ready to move in properties. Real estate rates had skyrocketed in the past few years, as many of the buyers were investors. Now, most people who are buying property are actual end-users. Rates have become stable and nominal. There is a turnaround in the market.
What is your inventory at this point?
In unsold under-construction projects, we have around 1,000 apartments in our inventory. We are working on 80 million sq ft area which is under construction. Work goes on in phases; right now, we plan to develop 45 mn sq ft out of that.
What are the changes in your company?
The only way to survive in today’s market is to give on-time delivery; that is what we are concentrating on. We have also created a separate customer relations cell, which gives e-service. On our website, a customer can have the full details of the status of his property. We have put in checks and balances so that a consumer can within seven days get redressal of his complaints.
