India''s macroeconomic fundamentals are improving. This positions the Real Estate sector to grow. The year gone by has been very challenging and headwinds have been consistent.
Despite this, your company made some strong progress. We got into a long-term platform partnership for commercial assets with Goldman Sachs, a well renowned global institution. We got out cost of capital down across the company business verticals.
We have had some serious challenges in obtaining approvals on 4 residential projects and one of them has come through. We are hopeful of getting the rest in the coming months.
One of the big regulatory breakthroughs has been the enactment of the Real Estate (Regulation and Development) Act, 2016. After years of resistance, the Real Estate regulative may finally see the light of day. The Regulation will facilitate standardization of norms in the Real Estate sector and this will bring in the much-needed transparency in the sector and differentiate quality players.
In a sector like Real Estate where multiple approvals are required, we are hoping that the Government gets into a digital platform and grants approvals - which will be a significant change for the industry. It will bring in a discipline of granting approvals in a time-bound manner, and an individual''s discretion to grant approvals will be eliminated.
Going forward, we shall be shifting from a heavy residential base to equally spreading the focus on commercial and residential real estate.
Our focus has been on delivering projects and our Executive Directors and the teams are determined in the coming year to deliver2000 homes to our customers.
At NEL, we are focused on preparing the organization for the times to come. On the one hand we have proactively been investing in long-term assets and new businesses and on the other have set ourselves ambitious targets for the next 5 years.
Leasing has crossed 50 percent in our shopping mall in Pune. Our occupancy in the hotel has crossed 65 percent. We gave 3 exits to NBFC and real estate funds and got our cost of capital down. This however did have an impact on the redemption premiums on the balance sheet.
We improved our employee engagement, creating a new performance management system in which managers provide continuous feedback and ongoing dialogue about performance.
To succeed, smart firms have to be agile by default. Agility is the ability of an enterprise to move with the speed and respond to changes in the environment swiftly (for example when launching new products). We are working on methodologies to adapt to newer lines of business, which may well the future of the company.
We as a company are working on diversification of asset classes in our portfolio and in the next 3-5 years this will add significant growth.
The Indian economy has become the fastest growing major economy in the world. The real estate sector is likely to disproportionately benefit and your company is well placed to continue its growth.
I would like to take this opportunity to thank all our employees, our customers, our business partners and our other business associates. I would also like to thank our shareholders for the continued support.
With Best Wishes,
Chairman & Managing Director