'Real estate sector should grow at 30% annually'

With projects ranging from affordable to premium, Tata Housing Development Co Ltd says it expects to be among the top three real estate entities in the next five years.

Brotin Banerjee, managing director and chief executive officer, talks to Business Standard on the sector and his own plans.

Edited excerpts:

Tata Housing is present in the affordable segment in a significant way. Do you plan to launch such projects in markets outside India? What is the investment for expansion abroad?

We are working with a few Southeast Asian governments to offer affordable housing in their countries.

Everything is in a planning or due-diligence stage and we would be able to comment on this at a later stage.

The company recently forayed into living space for seniors, through Riva in Bengaluru. How big would this segment be for the company over the next few years?

We are the first corporates to enter the senior living segment.

This decision was taken after two years of research, to understand the day-to-day issues faced by senior citizens like a growing sense of insecurity, craving for companionship, increasing physical disability and need for quality healthcare.

The segment has tremendous potential and makes for a viable investment from consumers and developers alike.

What will be the total investment in Riva projects and what other cities are next?

We have invested around Rs 70 crore (Rs 700 million).

We aim to make Riva Residences a pan-India brand and are looking to expand in markets including Mumbai, Ahmedabad, the National Capital Region and Chennai.

What is the current project portfolio across segments? And, what is the plan in terms of cities/states you want to enter?

Both companies -- Tata Housing and its subsidiary, Smart Value Homes Ltd -- will continue to expand their portfolios.

In 2013-14, we will be launching 15-20 million sq foot of projects and will continue to expand across 10 metros and emerging cities.

Besides, launches across consumer segments in Maharashtra, NCR, Bhubaneswar, Himachal Pradesh, Bengaluru and Kolkata will be done.

Five years down the line, where do you see Tata Housing?

We have aggressive growth plans. In the premium and luxury segment, we aspire to be India’s most preferred brand.

In the value & affordable segment, we aspire to be India’s largest home provider.

As a company on the whole, we see Tata Housing among the top three players in the Indian realty space.

Will the company focus more on the luxury segment because of the high margins or would it be luxury and affordable segments in equal proportion?

We will continue to focus across all consumer segments and expect all these to grow at a healthy pace.

We believe the affordable and low-housing segment is likely to see the highest growth.

Other segments will also grow as people aspire for better homes and a better quality of life, hence investing more in buying their homes.

The demand for luxury homes is coming from cities such as Bengaluru, Delhi, Chennai, Kolkata and Mumbai. More, there is an increasing demand from emergent and tier-II and tier-III cities.

Developers are introducing luxury and high-end projects in these cities as well.

Do you see prices in real estate stabilising over the years or would it continue to move up?

Price movements in the real estate market depend on the result of demand and supply.

We expect the prices to stabilise and don’t see any significant appreciation anytime soon.

With the Indian economy getting back on track, the real estate sector is expected to stabilise in the next two to three quarters.

We anticipate this sector to grow, albeit at a slightly lower pace, as the demand for housing still appears to exceed supply and the weakening rupee makes India an attractive real estate investment destination for non-resident Indians.

By recent reports, the sector is expected to grow at an annual 30 per cent over the next decade.

India is an attractive investment destination for multinational corporations and investors, who see a lot of potential in this country.

Allowing foreign direct investment in multibrand retailing will also give a push to the sector’s growth.

Image: Brotin Banerjee | Photograph, courtesy: Business Standard