It gives immense pleasure to address you once again.
During the year the Global economic growth 3%, the highest growth rate since 2011and growth is expected to remain steady for the coming year too.
The improved global economic situation provides an opportunity for countries to focus policies towards longer term issues such as low carbon economic growth, reducing inequalities, economic diversification and eliminating deep rooted barriers that hinder development.
In several major developed economies, imports of capital goods have rebounded, as firms respond to improving conditions for investment. Recent course adjustments in major trade relationships, such as BREXIT ,the United Kingdom of Great Britain and Northern Ireland’s decision to withdraw from the European Union and the United States of America’s decisions to impose extraordinary curb on trade with its counterpart China and vice versa by China, has emerged a challenge to the Global Trade.
In the milieu, the emerging economies might face some developmental restraint, thereby affecting the business.
India’s GDP is expected to grow at 7.3% in 2018-19. The Gross Domestic product (GDP) is expected to reach US$ 6 trillion by 2027 and achieve upper-middle income status on the back of digitisation, globalisation, favorable demographics and reforms. India is also focusing on renewable sources to generate energy.
Overview of the Real Estate Sector:
India’s un-housed may soon become a potent economic growth driver, thanks to the PM drive to bring homes to the country’s 1.3 billion people, rising incomes and the best affordability in two decades. The result may be a $ 1.3 trillion wave of investment in housing over the next seven years, according to CLSA India Pvt Ltd.
It is expected 60 million new homes to be built between 2018 and 2024, creating about 2 million jobs annually and giving a tailwind of as much as 75basis points (0.75%) to India’s GDP. The volume of social and affordable housing will rise almost 70% to 10.5 million annually by 2024, exceeding the 33% increase in the premium market.
The housing sector is at tipping point and will be the economy’s next big growth driver. The Government of India has been on the mission to expand affordable housing .In February the Government granted affordable housing builders “Infrastructure status” making them eligible for state incentives, subsidies, tax benefits and Institutional funding .In June 2015,it announced “Housing for all” programme which aims to construct 20 million homes across the country and in December’16 it announce rebates and interest waivers for home loans under this programme.
There are 70,000 companies which are engaged in this sector and a very sizeable amount of investment is made in this sector. The Indian real estate market is expected to touch US$ 180 billion by 2020.
The real estate sector is one of the most globally recognized sectors. In India, real estate is the second largest employer after agriculture and is slated to grow at 30 % over the next decade. The real estate sector comprises four sub sectors - housing, retail, hospitality and commercial. The growth of this sector is well complemented by the growth of the corporate environment and the demand for office space as well as urban and semi-urban accommodations. The construction industry ranks third among the 14 major sectors in terms of direct, indirect and induced effects in all sectors of the economy. It is also expected that this sector will incur more non-resident Indian (NRI) investments in both the short term and the long term.
Real Estate (Regulation and Development) Act 2017 (RERA) the game Changer:
The RERA ,aimed at bringing in transparency and redefining the engagement between the various stake holders, can be a potential game changing event.
The level playing field created between various stake holders would provide much needed confidence to investors and home buyers to take a relook at the sector and make a informed investment decisions. While the Act might transform the way in which the various stake holders operate, it will particularly have a far reaching impact on residential developers, who would need to recalibrate their business practices to stay in the game. RERA the single largest reform that the sector is going to witness is the implementation of RERA.. The Central Government has mandated June 30, 2018 as the last day for the States to implement the RERA without any dilution.
RERA in the state of Maharashtra has been made applicable for from May 2017.All the Projects of Marathon Group have been registered with Maha Rera Authority... RERA has completed a year of its existence in May 2018 and over 16,000 prijects have been registered with it. The Authority has restored the confidence of the buyers and regulated the sector which was unregulated for long.
Mumbai Development Plan -2034:
The recently unveiled Mumbai Development Plan (DP) 2034 speaks about creating 1 million affordable houses and 8 million jobs in the city of Mumbai. The DP envisages creating of theatres,museums,parks,play grounds, theme gardens, old age homes and shelters for homeless However the effectiveness of the DP remains to be seen as the execution is always the crux of the issue.
The DP talks of utilizing salt pan lands for affordable housing. According to the plan ,out of 3,355 hectares in no-development zone, BMC has earmarked 2,100 hectares as well as 330 hectares of salt pan lands for affordable housing .It is hoped that the environment activists allows the smooth transition of such areas.. To create more jobs, the DP has given incentives for commercial structures to have extra FSI. Residential buildings will also be given extra FSI subject to road width. The DP has also designated 12,859 hectares as natural spaces, a new category where no new will be allowed
The key challenges are stagnation inmarket prices and the inability to matchcurrent inventory costs vis-a-vis pricingof inventory in new projects launchedafter introduction of GST. Further,customers have been fence-sitters fora long time with the consideration that market prices have not yet bottomed out.However, the right product along with the right pricing is seeing traction in themarket.
The Company is working to create a unique value preposition to position ourselvesin the market in addition to scoutingopportunities and grow further. In closing, I would like to thank all of ourcustomers, consumers and shareholdersfor your continued support.
With warm regards,
Chetan R Shah
Chairman & Managing Director