The Banyan Tree Group is a leading player in the real estate sector in West Bengal. Abir Roy Chowdhury, Director, GSPR Developers, which is a part of The Banyan Tree Group, spoke to BE’s Kuntala Sarkar.
Q. What is the current scenario of the real estate sector in West Bengal?
A. The real estate sector as a whole is not functioning as it was a few years back. It is not only because of demonetisation and the Goods and Services Tax (GST). The market is currently saturated. The affordable segment is presently witnessing an excess of stock. There is an immense amount of competition in the market. However, very recently, the market is looking up and we are experiencing some renewed interest. But it is not to the extent it was a few years earlier. Advertisements are necessary and that was not the case earlier. As the market is relatively down, developers need to give lucrative offers to woo customers. How-ever, the situation seems to be worse in the luxury segment.
Q. How is the luxury real estate sector's response in the state?
A. The whole real estate sector (including luxury and affordable segments) was down about six months back. But it is now showing early signs of revival. We are still facing problems with the luxury segment and products above one crore price scale are still difficult to sell. The market seems confused at present and luxury segment buyers are very cautious as they are unsure about appreciation of their investments. The luxury real estate segment is still not responding well.
Q. How do you explain the scenario of affordable housing segment?
A. We are now focusing on the affordable segment. This is essentially products between the price ranges of Rs. 30 lakh to Rs. 50 lakh. The demand for parking plots is rising in the affordable segment. Most importantly, people are looking for complexes as compared to stand alone projects. In these complexes, we have to give modern amenities like gyms, swimming pools, clubs, and other such amenities to retain our customer base.
Q. What are your expansion plans in the affordable and luxury segments?
A. We have lined up around three projects in the affordable segment because we believe that segment has scope for prominent growth. We are planning to expand. We plan to construct around six lakh square feet in the affordable segment. In the luxury segment, we do not have any plans as of now. Our company mainly functions in and around Rajarhat, Kolkata. We also have our projects in Kankurgachi and in Southern Avenue. We are not planning to enter in the luxury segment any time soon.
Q. As a key player in the sector, how do you view the impact of the GST?
A. In our industry, we have a lot of stakeholders who are unskilled or semi-skilled and it is quite tough for them to have a GST number. This is a major problem. Secondly, different building materials are in different tax slabs and that adds to the confusion. Lastly, GST still seems to be in a state of flux. It is constantly being revised. We want the GST to be simple and understandable. Speaking specifically about our sector, there are some minor hiccups that we are facing regarding the new tax slabs. We have appointed our own GST consultant to help us overcome these initial problems.
Q. Do you evaluate the Real Estate (Regulation and Development) Act (RERA) positively at the national level? Are you facing any problem due to the recent Housing Industry Regulation Act (HIRA) rolled out by the government of West Bengal?
A. We do not know what is exactly going to happen after HIRA has been introduced by the Government of West Bengal. The central government has already rejected it. In our case, we practice fair trade and we believe that the customers’ benefit is our benefit. We are prepared for both RERA and HIRA. But there is some confusion regarding the law that we need to follow. We had to do various registrations but we need specific and simplified regulations. Both RERA and HIRA were framed to safeguard the interests of the customers. But there is also the need to safeguard the interests of the developers. We would not like to see these laws being misused to strong arm realtors who are already practicing fair business. We believe that none of the new regulations will harm realtors who practice fair trade.