Allow developers to invest in stressed assets: Sangeeta Prasad

Houses can be sold at places where people with wherewithal and resources are present and it can happen if job opportunities are also created, says Sangeeta Prasad, MD & CEO, Mahindra Lifespace Developers Ltd. In a candid chat with Swati Khandelwal, Prasad said the government should give opportunities to invest in stressed assets and deliver the units to customers. 

What are your expectations from the Union Budget 2019-20? 

I think, the government is aware of it and that’s why it introduced certain changes – at short intervals – in the tax regime. The changes had an impact on customer sentiments although developers faced problems in preparing for it. I expect the government will have a close look in this direction. 

Apart from this, a lot of stressed assets has entered the real estate market. Incidentally, banks and NBFCs have invested in those projects. So, the government should give an opportunity to branded developers like us to invest in those assets and deliver the units to customers that too at the right price. 

The Special Economic Zones (SEZs) have not performed well in India when compared to China. What is your opinion and why it didn’t succeed here? Do you think the government should focus on it?

I will not make a blanket statement that it has failed completely because we, as Mahindra’s, had an opportunity in SEZs and have had a good experience in the segment. Mahindra has SEZs in both of its World City’s, namely Jaipur and Chennai. Interestingly, the Mahindra World City Chennai’s SEZ was leased out quite back from now. Such reforms need stabilisation because they are long-term reforms and its impact is felt for a long time. So, it takes time to succeed. 

Mahindra Lifespace Developers is majorly present in Southern India. What is your outlook on demand and prices in the recent future?

Houses will be sold at places where people have the wherewithal and resources to buy them. It can happen if job opportunities are created and people are comfortable with what they are earning. So, we are mainly looking at Mumbai, Pune and Bangalore while we have opportunistic eyes on NCR. Thus, we are focusing on these geographies at present. When it comes to demand and supply, the presence of trust deficit within customers should be taken into consideration. I feel, demand uptick is needed in these markets and we need to make our presence felt in these areas. 

The government is looking at reducing the interest rate in the sector. Do you think this will be done? If yes, the rates should be reduced by what per cent or do you think a special window should be created? 

The government should work on either of the fronts; either reduce the interest rate or facilitate investment or ease the process of getting funds. Most importantly, it should ease the process of getting approvals and policies, as well as make things certain and stable for a period. 

Do you think Rera has succeeded or it should be updated?

Such regulatory reforms bring transparency and stability in the market because it increases the responsibility and accountability of the developers while doing business. Rera is very good but it has taken some time to transit from the Centre to the state level, although each state has a different point of view on the matter. But in medium to long term, I think Rera is one of the best things that has happened for the industry. However, teething problems occur every time reform is implemented. It is very good for branded players as well as for the customers.  

— Zee Media Newsroom