A POSITIVE MOVE

Intro: Rocky Israni, Managing Director, Pacifica Group is positive about the growth of the real estate market in Gujarat and shares his immense knowledge and views on the subject with Realty Plus A Correspondent Ahmedabad is a one of the most sought after cities in India as far as the real estate market is concerned. The infrastructure is good and facilities are attracting more and more buyers with time. Pacifica Group is also one of the best real estate companies operating out of 6 cities including Ahmedabad. Pacifica, which commenced operations in the real estate market in US has now started operations in India as well and brings over 30 years of positive experience for the Indian home buyer today. “We have been a real estate company in the US since 30 years now and started operations in India about a decade ago,” informs Rocky Israni, Managing Director of the group in India. They started operations in Ahmedabad in 2005 and there has been no looking back ever since. The company has managed to create a market for itself and has managed to retain the brand value it has created in the global market as well, in a market which Israni opines is stable now. “The market is stable but sales are low and velocity is down. Although, we don’t have a huge unsold inventory and bookings are decent. Most builders are able to sell their homes in the normal time frame i.e 3 to 4 years from launch to delivery. Most are also delivering on time now, but new launches have slowed down over the past 4 years,” he avers. The biggest asset for a state like Gujarat is the good infrastructure and connectivity, which according to Israni is always a positive aspect in the real estate market. “Infrastructure leads to projects and more land becomes available as more projects are initiated. Distances become shorter and commuting easier for the end user. Because new lands are available, prices become stable. For instance, if you compare to Mumbai and NCT to Ahmedabad, the latter is more affordable due to price stability and land availability and at the end of it the consumer is benefitted at large,” explains Israni adding that price stability is an important factor in the real estate market. With more and more projects like GIFT coming to Gujarat and prospects going up, Israni is positive about the growth of the real estate market here. “We haven’t participated in GIFT as of today, but we did participate in it 5 years ago but things did not materialise then. The State and Centre under the able guidance of honourable former Chief Minister of Gujarat Shri Narendra Modiaji who is now the Prime Minister, are taking full efforts to make GIFT a huge success and that is definitely a good move. If you compare rents at BKC in Mumbai and compare them to GIFT along with the facilities and infrastructure them GIFT would be a better option for all financial biggies in India. Financial institutions are indeed planning to come and with a good infrastructure and all facilities, thing are looking up. We still have not evaluated what opportunities are in store at GIFT for a private builder, but we will see how things go and then take a call. Right now we are not looking at that model,” informs Israni. So, the shift from a developed market like the US to India seems to be a challenge for all those who commence operations here and Israni does agree that the move was a challenge but has been worth it for Pacifica. “Technology, regulations, sales methodology is different in the US and India and we need to adapt to each city, state and country and get accustomed to the rules, regulations and consumer mindset with time. If you see labor is expensive in the US as compared to India and hence, technology is something we need to change. For instance you need to have insulated homes in the US due to extreme climates there, but here it is not the same senario. Similarly, costs are different and loan rates are different. So you need to design and work to suit the conditions here. There you need to build and sell but here you can sell and build subsequently,” reveals Israni adding that there is a need to have a regulator for the Indian real estate market for the safety and security of the buyer. “We need a regulator here and that will help the consumer a lot. In the US people give money to Escrow and once you get the title in hand the builder gets the money, so it is very safe. There is accountability. We follow the same rules within our company here. Any money that comes in goes into the project, so we are regulating ourselves without a regulator,” he says. So, are people now more keen on investing in the US as well with the new policy change that allows any Indian to spend around 2,50,000 USD in property there? Israni replies in the negative. “For Indians Dubai and UK are better markets than the US, because of the mindset. Unless they have family ties, people would not invest in US. Then again this policy is not so helpful for the economy as money is going out. However, coming to the market there the fact is that new home sales are low in US and most investments being made is for old homes and so we have a lesser role to play as the secondary market is better than new homes market so for a developer it doesn’t make economic sense. Also, for the buyer, I don’t think the returns are that good and it is not economically viable also. The most important aspect is that India is performing better the fascination to go there has also died down with time. Last year only 30 people approximately have applied for EB5 visa so you can gauge how lucrative the prospects are,” he discloses. Pacifica, which already has a presence globally and in 6 cities of India is however not keen on venturing into newer markets like Mumbai as of now. “We do want to penetrate in many more cities than what we now but managing the 6 cities is a handful now and so moving to Mumbai and other cities is on hold. The market is also not that fast today. Any builder who focuses more on the city that they are in achieves a lot more than entering new markets as you remain focussed, build more brand value and gain more leverage in the places you are in currently. Once we have penetrated well and need more growth then we may move to other cities but as of now we are doing well where we are,” he states. Buyers today also opine that brand value is very important factor before buying and selecting a house for them and safety of their investment is the most important of all. Israni agrees and states that it is very important that a buyer does his due diligence before buying a house and believes that it is a key to safety and security as homes bring with them a lot of emotional and sentimental value. “Do your due diligence and check all projects, the reputation of builders online and on site before taking a final call. One needs to make comparison charts. We, in fact, assist people in making charts and check on all projects in the area before buying our property. One needs to see what one is getting at the end of the day. For instance, how much carpet you get? What you pay for car parking? needs to checked. Media should also educate buyers and buyers should know who is what and what he / she should buy after evaluation by simple due diligence. Check online, visit sites, do not buy pre-sales, do not buy if the ground is not broken or if construction has not started. If it is a first time developer check all facts and figures and background and feasibility also,” he suggests and concludes, “Buying a home is a big thing and we at Pacifica know and respect that fact and we feel each and every one should spend some time doing their homework before buying a home.”