- “The first month was a complete washout, it was terrible,” said Raheja. However, the sales started recovering in May and June.
- There is no scope for lowering prices in the mid housing segment,
- it is imperative to make the change with a long-term vision. – Nayan Raheja
In the last few months, the pandemic has taught people many lessons and one of them is the significance of having a roof over their head which they can call their own in the midst of a crisis.
Meanwhile, the Indian economy is suffering from the twin problems of increasing Covid infections and job losses. While the first pushes for the need to purchase a bigger home, the other may postpone plans of homebuyers.
To solve this muddle, The Blue Circle talked to Ar. Nayan Raheja, Raheja Developers, where he shared his views on the current state of the real estate market, strategies adopted to cope with it, and the challenges ahead.
Real Estate Since Lockdown
“The first month was a complete washout, it was terrible,” said Raheja. However, the sales started recovering in May and June. Raheja attributed the revival in sales to the uptick in the luxury segment, which saw significant growth even in the under-construction projects. “This may be a unique parameter to us,” he said.
Though the mid-segment housing sales took a huge blow due to job losses and salary cuts, the ready-to-move-in housing segment has been in green due to the rising need for individual housing and increased adoption of the work-from-home regime.
People are investing to equip their houses with better interiors while a built-in-office setup is expected to become an indispensable part of every house in the coming future.
Raheja reckons that volatility in the stock market and Systematic Investment Plans (SIPs) will move the money into real estate assets. Investment in property could act as a cushion during the crumbling economic landscape and rising inflation.
“We are bullish on plotted developments, residential as well as commercial,” said Raheja. He is also looking to launch more shop/office projects in the future.
However, the next month might be challenging in the ready asset segments, both retail and commercial due to fewer people going out to offices and shopping. “In the long term, things will get better,” said Raheja.
Addressing the Labour Issues
As soon as the lockdown was announced, migrant workers fled back to their villages, leaving construction sites unattended for days. Developers across the country are feeling the pain of the labour supply issue.
But Raheja Developers were largely immune to the migration crisis. At most sites, the company has a policy of direct payroll for labourers- salary is added directly to their accounts, eliminating the need for a subcontractor.
“On the sites, 100% salaries have been paid, regardless of the lockdown,” shared Raheja. Additionally, the company supported its workers with food and other healthcare benefits. It has also been running a centralised buffet system for labourers, much before the Covid outbreak and lockdown.
“They have reciprocated by supporting us when we needed them,” said Raheja.
During the last three months, Raheja Developers faced a 30% labour shortage, which is now almost back to the pre-Covid times with a small difference of 5-10%.
People at all construction sites are mandated to follow strict sanitisation and safety protocols followed by regular testing.
The firm is also running a referral scheme under which labourers who manage to get more workers are rewarded with cash. Besides, they have also sent agents to different states such as Rajasthan to scout labour. Other measures include connecting with labour supplier firms and flipping through the database of previous workers, incentivising them to join back.
“It was unfortunate for a lot of migrant labour as they were not paid and had to go back home,” said Raheja in disappointment.
Office staff is given the option to work from home by following company protocols like online attendance and log-in software.
Is Money being Paid?
Collections have been extremely slow during the last three months but are picking up gradually. Raheja has allowed relaxation for clients facing financial crunch in the housing segment. In shopping retail malls, they have supported tenants through rental waivers.
“Many people staying on rent are willing to shift to their first house, in almost every segment,” said Raheja. The company has come up with attractive schemes such as Covid insurance for the family to incentivise homebuyers.
Speaking on the price front, Raheja said there is no scope of lowering prices in the mid housing segment since the selling prices are already at break-even level. For the ongoing projects, he expects a delay in project completion and appreciated the government and RERA’s effort in extending the time period.
Newly Constructed Homes Won’t Be the Same
The newly constructed houses will undergo significant revamp to align with the needs of the post-pandemic world. However, advising caution, Raheja said it is imperative that we make the change with a long-term vision.
Raheja developer has already started incorporating the changes needed to ensure a safe and secure environment for its residents. To start with, sanitisation tunnels and chambers have been added on the ground floor lobbies of buildings.
Additionally, there are plans to provide hand washing facilities on each floor lobby and a shoe rack for the shoes to remain outside the apartment. In one of their residential colonies, they are installing touch-less elevators that would operate with an app or voice control. A similar touch-less system will be applied to the water tap as well.
The company is also building 1-2 acre low-density eco farmhouses, right next to Gurugram, based on the model of 100% sustainability. Solar energy will be used for electricity and there will be provision for on-site organic farming for food, poultry, fishes and honey.
Projects and Motivation
Raheja is constructing Delhi’s tallest mix-use development of luxury hotel residences and Delhi mall at main Patel Nagar road. Leela Sky Villas Navin Minar which is the residential part, stands at around 190-200m and is the first branded residence with Leela Hotels. It is a fully serviced residence project with a mix of housing and hospitality of the Leela hotel. From the reception to the laundry, it is designed to replicate the experience of a hotel. The apartments will be equipped with a small pool for the family and a disaster bunker to handle calamities.
The Delhi mall is the other part of the development. The mall has partnered with brands like Shoppers Stop for retail and Inox to provide theatre experience. Raheja reckons this project as one of the most challenging and exciting projects of his career.
Recently, the company has built Gurugram’s tallest building, Raheja Revanta, a 62-story structure. Leading architects and developers from across the world were consulted including Burj Khalifa’s builders Arabtec Construction.
Raheja Developer was recently adjudged the most iconic real estate brand of 2020 by Economic times.
Apart from construction, Nayan Raheja is a musician and an avid photographer. During the lockdown, he has been performing in a virtual concert. His love for wildlife photography can be substantiated from the fact that the longest-running tv series on wildlife has been under Raheja’s production which has been played on Doordarshan, National Geographic, and many more.
“The motive is to contribute to changing the perception and bring about some level of importance about nature in people’s lives,” shared Raheja.
(Edited by Anu Choudary)
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