The year that was and looking ahead (2018-19)
Reflections on the real estate industry from 2018
The real estate market has proved to be resilient in 2018. Despite witnessing several major policy changes with the implementation of RERA and GST, we have still managed to do well as an industry. There is stress in certain quarters, but the developers who are established, show commitment to corporate governance and transparency are succeeding. With GST and RERA stabilising, the real estate sector is on the cusp of a complete makeover. The buyers and the developers have reconciled themselves to the additional costs, and the market is all set to witness further growth. There are been several new launches in the market, rents have gone up and the commercial sector has been thriving with close to zero vacancy rates.
Prestige Group - Highlights of 2018
As far as Prestige is concerned, it has been quite an amazing year for us. Among the most exciting highlights in 2018 was the fact that we completed 10,000+ apartments and over 100mn sft of development which are significant milestones for any real estate developer. We also completed one of our most prestigious / luxurious developments with Kingfisher Towers which we inaugurated on 30 November 2018. Considered an engineering miracle, it is yet another landmark to dot Bangalore’s skyline. Apart from this, we completed Phase 1 of Prestige Lakeside Habitat, the largest residential development by the company till date, in terms of acreage and the total number of residences. The 102-acre property is the biggest upcoming residential township development in the country today.
In addition, we completed and inaugurated two of our most prestigious hotel properties, namely Conrad Bengaluru and the Sheraton Grand Whitefield Hotel and Convention Centre, Prestige Shantiniketan. We also opened two more ‘Forum’ malls with Forum Shantiniketan in Whitefield and Forum City Centre Mall in Mysore, and acquired a mall in Udaipur. Apart from this, we have completed about 3 million sq. ft., of IT office space, mostly in Bangalore.
2018 also witnessed the launch of several residential properties including Prestige Jindal City (Bangalore) and Prestige Courtyards (Chennai), to name a few. These have all met with fair success. Moreover, the overall business, in terms of sales and leasing, has been quite good. We’ve seen some great momentum.
In terms of Retail, we are currently one of the largest mall owners in the country, and have done very well in this segment this year. The footfalls have been good and all our malls have done great business. Having said that, the retail sector is one where you need to have focused activity. I believe that all malls are not going to succeed. We are witnessing success with our malls primarily because we have managed to instil that trust among our tenants, where they listen to us and allow us to guide them, which is a rarity in this industry. Moreover, we are able to understand and establish the right product mix into our retail malls. All our retailers are trading well, and within this, Forum Koramanagala continues to have the highest yield per sq ft.
Warehousing & logistics is another asset class that we are concentrating on. We completed Prestige Logistics Centre (Mallur), our first warehouse centre in the State, and that has been leased out to Flipkart. Prestige Group has been a pioneer in developing IT and Office Parks in South India with an occupier tenant portfolio of global and Indian corporations. Various policy decisions like the implementation of GST and the e-way bill have given a boost to the logistics sector, as well. This coupled with the growth in the e-commerce and retail sectors has necessitated a sharp growth in warehousing in the country, and we foresee a huge demand for plug and play in this space.
Additional highlights from 2018:
Plans for 2019
Currently, we have several projects running in Ahmedabad, Hyderabad, Chennai, and Bangalore. One of the biggest highlights of 2019 for the Prestige Group will be our launch in Mumbai. We have officially entered Mumbai with a property in Byculla, and are in the process of securing all approvals for its launch. In addition, we’ve got the approvals in place for our Pune land which we obtained about 18 months ago. We hope to launch that in Q1 of 2019.
Prediction for the real estate industry for 2019
Though it’s an election year, 2019 is expected to be a good and productive year, with the market being stronger than it was in 2018. We also expect it to be much more positive with much better sales and revenues as we go along.
The residential real estate market is expected to grow significantly in 2019. In a country like India, given our population, the need for housing is constant. Other factors like urbanization, the rise of nuclear families, increased disposable incomes, and monetary benefits have all further contributed to create a stronger demand for housing. Affordable housing is of course, the need of the hour. Having said that, I expect housing across categories to do well. Luxury housing being a niche market, witnesses a slower momentum. Given that there is quite a lot of inventory in the market currently, luxury housing will continue to move slowly. But having said that, it’s not necessary that one will trade off with another. Depending on the supply that comes in, the market will start stabilizing overall across all segments of housing.
Finally, I want to end this note with a quote by Mahatma Gandhi - “Be the change that you wish to see in the world.” We all need to do our bit, both to evolve as individuals and to ensure progress. As we enter a New Year, full of new hopes, dreams and possibilities, I would like to take this opportunity to thank all our patrons and friends for their continued support, and wish everyone a wonderful and prosperous 2019!
Authored Mr. Irfan Razack – CMD, Prestige Group
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