In an interview with HT Brand Studio, Ashish Bhutani, managing director at Bhutani Group, discusses key trends in this sector, the future of office spaces, as well as potential investment opportunities
In an interview with HT Brand Studio, Ashish Bhutani, managing director of Bhutani Group, tells us how there has been a turnaround in investor sentiments towards the CRE sector with the introduction of reforms such as the Real Estate Regulatory Act (RERA) and the Goods and Services Tax (GST) . He also highlights how technology in the real estate segment is proving to be a game-changer.
What are the key trends in commercial real estate that the Bhutani Infra is looking at?
The commercial real estate space can be categorized into two parts: end-use and investment.
Let’s talk about the former one first. India continues to be the fastest growing economy in the world, despite intermittent hiccups. As per the Asian Development Bank, India’s GDP will grow by 7.2% in FY19, mainly on the back of strong consumption and spurred by rising incomes, mild inflation, and robust remittances.
In a nutshell, the economic and business environment will be vibrant. As a result, more and more corporates and start-ups will look for office space. There will also be a rise in demand for co-working spaces.
When it comes to CRE investing, we are expecting an all-new phase of boom this year. The segment offers Return on Investment (ROI) at 5-9 % per annum, compared to 2-3% in residential real estate. On the other hand, the ticket size in CRE is such that one can start investing with a few lakhs, unlike in residential real estate, where millions of rupees are needed.
In my view, CRE will drive growth in the real estate sector that contributes 5-6% to the GDP.
According to the Economic Survey 2017-18, the Indian real sector attracted FDI worth $257 million in the second half of 2017. What is your view on that?
Global investors have always wanted to enhance their presence in India, which is an attractive economy. However, a lack of transparency and accountability in the market has traditionally acted as deterrents.
Today, there has been an explicit improvement in the investor sentiments towards the CRE sector, thanks to reforms such as RERA and GST.
There could be some slowdown in the coming months on account of general elections, but once the new government is established, foreign capital inflow should go strong.
What is the idea behind futuristic office spaces? What are some of the innovations that Bhutani Infra has led in this field?
An office space should not be just an office space. People spend a considerable amount of time in their work environments, and they need to be such that they help enhance an employee’s productivity, while giving him all the comfort and convenience.
All our projects are developed with this thought in mind. Our office buildings are not just workspaces—they are "lifespaces". We ensure that all our clients get world-class experiences.
Is it true that PropTech is about to disrupt the real estate industry?
Indeed! Be it construction or end-user experiences, it will redefine the way real estate is developed, procured, and used.
Gone are the days when real estate was bought on the basis of advice from others. With the advent of digital technologies, people are being able to enter the real estate market more confidently. Today, one can explore and compare properties at his or her own pace. The use of Augmented Reality (AR), for instance, enables you to check out properties across the world.
The use of technology has also reduced construction time to a great extent.
Location plays an important role in real estate investment. How would you rate Noida as a location?
First off, the quality of both physical and social infrastructure in this zone is far more superior to that of other areas. It is connected to Delhi, Gurgaon, Faridabad and Ghaziabad through roads and the metro rail. The international airport project is also underway.
Currently, property prices in this region are still modest, thereby signalling unprecedented investment benefits.
As we learnt from above, investing in commercial properties is indeed lucrative. Whether you are a first-time investor or have been in the business for long, you should consider commercial realty as an option. However, before investing, don’t forget to keep a few factors in mind, such as quality of the infrastructure, location of the project, and the rents that it will fetch.