Ozone Group is one of the few developers in the country that offer a range of options from residential condominiums, row houses, villas, service apartments, hotels, resorts, business parks, SEZs to integrated townships. The company, at present, has over 14 million sq. ft. of land under various phase of development spread across Bangalore, Chennai, Mumbai and Goa.
Replying to Newsbarons, Srinivasan Gopalan – Group CEO, Ozone Group, “We are also adding a few projects to our Mumbai portfolio which will be launched in the next 6 months.”
NB: Brief us about your current and upcoming projects?
Srinivasan Gopalan: We are currently focussing on three geographies i.e. Bangalore, Chennai and Mumbai. We have recently acquired a 1 million sq. ft. of IT SEZ in Chennai. We are about to launch a new residential development on Budigere cross in Bangalore. We are also adding a few projects to our Mumbai portfolio which will be launched in the next 6 months.
NB: How much are you raising via Private equity and debt?
Srinivasan Gopalan: We always try to alter our equity as well as debt portfolio to ensure that the projects are financially supported by the right capital structure that helps us run and execute the project in the most efficient manner.
NB: How demand has changed for mass housing in Mumbai?
Srinivasan Gopalan: Mass housing has got a huge push thanks to the union government’s initiative – “Housing for All by 2022”. Although, when it was proposed, it seemed too good to be true, the way things have progressed in this direction, leading way to results is simply brilliant.
Today, there is a balance maintained between demand and supply when it comes to affordable housing with both being met. Trends and market reports suggest that the affordable segment will continue to see most demand with property available across budgets starting from Rs. 10 lakh and onwards. Better job prospects have led to many people moving to Tier-1 and Tier-2 cities. Affordable housing has generated significant interest for many as they are eager to own a property of their own and stay with their families.
Additionally, with government backing the segment with good incentives, it is envisaged to be an attractive investment option yielding high and positive returns, thus channelizing more demand.
NB: What are the benefits of Demonetization on Real Estate Sector?
Srinivasan Gopalan: Demonetization was a landmark step by the government in its fight against corruption, also one of the government’s to do mention in the election manifesto. Like many initiatives, this has also started showing positive results and the years to come will determine its complete success. As a first step, demonetization led to a transparent transaction system in the real estate segment, which the segment was striving for a long time to attain.
A segment where many unorganised players operated and defaulted on their commitments thus maligning the segment itself, were forced to shut shop or turn the transparent way.
NB: Brief us about the Highlights on Better Financial Management by the Developers?
Srinivasan Gopalan: Pre RERA implementation, developers had a problem with better finance management because of the unorganised way of working in the real estate segment. Post implementation of RERA, this is slowly taking a turn and the segment is becoming more organised. Developers have to plan meticulously as funds from one project cannot be invested in another. Additionally, any delay in delivery will directly result in heavy fines. Apart from banks where developers have to deal with heavy interest rates, they can look at options like private equity which will reduce the burden of interests.
For a better financial management, the overall capital structure has to be equity oriented as compared to debt oriented one. Additionally, with the market sentiments bending towards a positive sign, developers can explore the option of an IPO to generate funds. IPO will unlock a lot of valuation and help in branding. It is also a good idea to commence construction work once all approvals are in place as any stall in project will result in direct loss of money.
NB: Impact of RERA on real estate with consumer-friendly policies and increased transparency?
Srinivasan Gopalan: Implementation of RERA is a welcome step as it has instilled buyer confidence that they were looking out from the real estate segment for many years now. With the strong backing of RERA, fence sitters and people who were avoiding real estate as an asset class have now started showing interest in the same. In any purchase, the buyer looks for “What you see is What you get”.
This factor had affected the real estate industry with presence of several fly-by-night operators who would shut shop before handing out the property or hand over something that was not close to what was promised. This presence of unorganised business ethics hit the industry’s growth too. With RERA in place, even agents and brokers have to be RERA certified. The particular state RERA website hosts detailed information about projects- its commencement and its completion and information about the developers involved, thereby helping them take a suitable decision.
NB: Are you in talks with Goldman Sachs?
Srinivasan Gopalan: We always evaluate new opportunities and innovative financing structures to de-stress projects to ensure delivery in the quickest time possible. We are a very institution friendly organization and are in talks with several financial institutions from time to time.
NB: Your outlook on the real estate industry per se?
Srinivasan Gopalan: The real estate industry is perhaps stepping towards the best phase with the sector seeing lot of initiatives that will translate into growth in the coming years. Demonetization, Implementation of RERA and GST have brought about transparency in the system. Operations have been streamlined the sector is becoming organised.
The eradication of fly-by-night operators or non-reputed developers is helping the segment gain the credibility and honesty that it has deserved. Today, projects delivered are at par with global standards with quality construction and aesthetic designs. New trends like themed residences, gated communities that cater to requirements across ages etc. are in demand and are at met with. Awarding infrastructure status to the affordable housing segment is just the beginning and we as an industry are sure that going forward the real estate segment will also be awarded the industry status that we have been asking for and well deserve.