We will see a new Hyderabad in 5 years
Credai Hyd’s Rajashekar Reddy says office space consumption main driver of realty growth in the city
How the new government policy on construction permits which is currently under formulation in Telangana will help the real estate sector?
The proposed TS bPASS will speed up the permission process for real estate and building construction projects. It will be on the lines of TS iPASS (Telangana State Industrial Projects Approval and Self-certification System) which provides single window clearance for industrial projects. If a real estate builder applies for permission through TS bPASS channel, he will get the permission through single window clearance. Each of the government department that has to grant permission will have a nodal officer who takes care of the approvals for each project. If the builder doesn't get approval in 21 days, the project will be deemed as approved. Under the current approval process, it takes not less than two years for builders to secure all the approvals for big real estate projects. Under this new policy, all permissions will have to be accorded in 21 days. However, we told the government that it will be of immense help for us even if all the permissions are granted in three months. That will reduce cost of construction greatly as builders will have to pay interest on loans if the process is delayed. Unlike in the past, builders are taking up large projects these days as funding availability has improved. The new approval system will revolutionise the real estate sector in Telangana.
We are now in the year 2020. Where do you see Hyderabad heading by the year 2025?
We will see a new Hyderabad in next five years if the existing government continues. That's for sure. Personally, we don't support any political party and all parties are same for us. But continuity in governance always helps the sector. We need to accept the fact that the Telangana government has brought in enormous positive change in the last five years. No one expected the kind of growth real estate sector and economy clocked in the last five years. The State is heading in right direction. As builders and citizens, we need to think what we can do to maintain the growth momentum. Real estate sector is growing now because there is proactive government and positive environment is prevailing all around. The sector can only continue the growth if the positive environment continues.
What level of growth you are anticipating in Hyderabad realty over next five years?
Real estate sector is currently clocking 30 per cent growth year-on-year. However, it may vary from category to category. But it is not easy to read into future and forecast growth for next five years. However, there will be large-scale employment generation as the consumption of commercial space in Hyderabad is at record levels. This city even outsmarted Bengaluru in this segment. Office space absorption is the main driver of real estate growth as it will fuel growth in residential segment. Furthermore, city will spread in all directions thanks to the Telangana government's efforts to encourage development in all corners of the city. Till now, western part of Hyderabad is the place where real estate growth has taken place. This will change in future as eastern side of Hyderabad is also witnessing record growth levels.
What kind of new initiatives you are expecting from the Telangana government?
Initially, I had doubts about various initiatives taken up by the Telangana government. But despite hurdles, it completed mega Kaleshwaram irrigation project. TS-iPASS has revolutionised industrial approval process. Thereafter, the government started focusing on Tier 2 and 3 cities. This move is also giving good results now and we have seen the changes in some cities. This will lead to decentralisation of development. The government also took up pharma city on the city outskirts. These are indications that the government is developing the State in phases. Till now, 60 to 70 per cent of major initiatives launched by Telangana are successful.
Is real estate sector seeking any infrastructure projects in Hyderabad?
What we want is further decentralisation in the city. The Telangana government should also formulate policy on the development of townships which will help the sector in a big way.
Andhra Pradesh is trying to shift its capital from Amaravati. Will this delay in finalising capital city for Andhra Pradesh will benefit Hyderabad realty?
The fact of the matter is that Hyderabad and the growth in its real estate sector is not depended on a single factor. Andhra Pradesh is a separate State and it has its own issues. I don't think negative factors in AP will benefit Hyderabad real estate. This city has its own strengths. We are getting investments and companies from all over the world. Therefore, real estate will continue its high growth trajectory in future. Hyderabad is in a different league now.