26 October 2017
The real estate industry is in the phase of huge consolidation and organisation, driven by the Real Estate Regulation Act (RERA), said Anuj Puri, Chairman, Anarock Property Consultants.
Addressing the students of RICS SBE, Puri made a compelling case for the Act and how it would benefit the industry and the stakeholders in the long run. As a part of the consolidation, processes are getting streamlined as developers and brokers fall in line to comply with the requirements of the law, he elaborated.
The residential sector, in particular, stands to gain a lot from this. During the coming days, the developers who are unable to meet the demands of the law and those who bring bad repute to the industry would disappear.
“I believe in the next 18 months, 60-70% of the developers would evaporate,”cautioned Puri.
This means only the genuine players would continue to operate. More so, the serious players from other sectors can get into the real estate industry in the next three years such as Tata, Birla, Godrej, Bharti, TVS and Piramal, he predicted.
The law has mandated the need for registration and licensing, just like it is in Singapore, London and the USA. Pointing to statistics, Puri assessed that there are approximately 55,000 brokers in Maharashtra. Till date, only 10,000 have registered.
“This means 80% of the real estate the broking business has been wiped off.”
Slump and recovery
In 2006, the capital markets opened up, ushering in a wave of liberalization in real estate. Foreign direct investments came in and the country saw the growth of malls. But when the global markets were down, the malls that were unable to make money for the developers had to shut down. Those who couldn’t cope up faced heavy financial stress. The residential market also saw a slump.
But this is all in the past. Going forward, now with RERA in action, Puri sees a lot of promise in the industry, especially the residential space.
From 2008 to 2016, the industry was not highly regulated and efficient. Today, RERA has made the industry regulated and organised, with an accent on governance, compliance, professionalism and ethics. “This consolidation phase will go up to 2020,” predicted Puri, urging students and aspiring real estate professionals to capitalise on the growth trends and opportunities in the coming days.
Need for talent
As the industry gears up to meet future demands, there are certain challenges that need to be addressed. The biggest of them is the need for skilled talent. There are not too many educational institutions that specialize in real estate education. The need of the hour is more talent with domain knowledge and expertise, said Puri.
Skills that will help you win
Apart from knowledge, real estate professionals also need to nurture certain skills which will help them excel in their profession, Puri advised the students.
They are as follows:
Passion: You have to love real estate to be part of this profession. This is the without doubt the most important one.
Networking: To be successful in the profession, you need good networking skills. This may not come naturally but you need to develop it. You have to go out there and create relationships.
Emotion: Use emotions as your energy. It is not always a sign of weakness. It can also be a huge source of strength and a huge sign of commitment and sincerity. An emotional connect and bonding with others makes a huge impact in this industry.
Trust: Trust is a word that is often used in real estate. If you gain the trust of clients, they will definitely maintain a long term relationship with you.
Clarity: Be clear of what you want. Know where to fight and what to fight for.
Work hard: There is no success in this industry unless you work hard.
Anuj Puri is the Chairman of Anarock Property Consultants. He is also the ex-chairman of JLLR and former head of JLL India. He has over 27 years of experience in multi-disciplinary advisory and transactions ranging from real estate to social development projects. At JLL India, he was responsible for the overall direction, strategy and growth of the largest premier real estate services company in India, overseeing a team of over 4,800 employees across 11 cities.