Sushil Mantri, CMD, Mantri Developers Pvt. Ltd, is a pioneer in Indian realty sector, whose vision has set up a new benchmark for the luxury segment in India. Mantri Developers is an organization that has established its leadership standing in real estate development in Southern India in a span of just 11 years.
The journey of Mantri Developers Pvt. Ltd, started in 1999 with Mr. Sushil Mantri moving to Bangalore to set up the organization. Today, around a decade later, Mr. Sushil Mantri, a visionary with an astute and resolute sense of enterprise, made the transition from entrepreneur to industry trendsetter with absolute panache and understated ability.
His rise to being one of the top leaders in the property development business saw him being nominated for the prestigious Ernst & Young "Entrepreneur of the Year 2003" award. He was also recently honored with the "Young Visionary Award in Real Estate Infrastructure" from Construction Source India in 2010.
MakaanIQ got an opportunity to interact with Mr. Mantri. In this brief interaction he shares what is in store for the realty sector in the coming few years….
1. What is your medium term (9-12 months) outlook for the real estate market in India in general and South India in particular?
On a medium term basis, low ticket size apartments will sell fast and will do well. For the ticket size more than 80 lacs, post budget 2013 could give the roadmap. Delhi has overtaken Mumbai in terms of housing loan disbursements. Delhi real estate market is expected to remain stable while Mumbai real estate market will continue see dampening sales. There could be some corrections in Mumbai. In south India the IT sector has given increments to its employees in the range of 3-5% which is less than inflation, this indicates that the disposable income of the prospective customers has gone down. In such a scenario we do not expect much movement in the segments that are greater than 50 lacs. However, below 50 lacs segment is doing well.
2. How is real estate in South India different from rest of the country specially North and West markets?
South India customers are 80% end user driven – so delays are noticeable and highlighted – project completion and timely delivery is the expectation of the customer while North Indian market is 80% investor driven – the hype around real estate is high. Delay of projects is also high and it appears that the customers along with the developers are into price escalation benefits. West Indian market is very similar to that of North India.
3. What is your opinion on Luxury or Public Housing? As a developer, which is more sustainable?
From a developer’s point of view project which is sold out before structure completion & that is delivered to customers in time, is sustainable. It will be improper to compare public housing vs luxury housing as the model is different. Both have excellent prospects, however it advisable to have a good mix of public housing & luxury in the portfolio as product offering.
4. How is your experience in working with the Public sectors in the infrastructural development, like Bangalore Metro Rail Corporation Ltd (BMRCL)?
It is the 1st of its kind in Karnataka and also for us. The learning has been immense and we are still learning to manage expectations of each other so that it is a win-win situation. The state government is very supportive to remove the bottlenecks in a timely manner and the BMRCL team is very talented & result oriented. Being a private sector company it is encouraging to see the private sector like approach of BMRCL, obviously the credit should go to the leader.
5. The number of unsold inventory is increasing in all real estate markets, what could be the reason behind this? Just the soaring property prices or any other factor attributing to it?
Customers are waiting for price corrections and lower interest rates 1% increase in interest rates increases the burden on the customer by 7%. The overall economic scenario is that of a caution, so customers want to wait before they commit their EMIs.
6. What policies you look forward to from the Government and RBI that will be a relief to home buyers across India?
From the Government and RBI we are looking forward for a lot of relief factors. Given below are a few.
a. Resolve the multiple taxation issue of Stamp duty, VAT & Service tax which is only in this sector
b. Appoint of a single government agency to certify ownership of land to close land title issues
c. Fast track special courts to clear land title litigations
d. Adopt the Single Window Approval system for faster approvals at the local govt body level (BDA)
e. Change in the city master planning process from 15 years to 40 years outlook
f. Suitable modifications in the FDI rules to involve all small & big developers
g. Tax holidays for residential projects to attract better technology usage
h. Industry status for the real estate sector to facilitate capital at preferential rates
From the RBI
a. Lower interest rates
b. Infuse capital liquidity in the economy
c. Ease of regulations w.r.t to lending to the real estate sector
7. What is the current trend in the Commercial Real Estate Market? How are developers meeting the increasing demand of the corporate sector? Which are the upcoming corporate bases?
Prices of commercial properties have corrected by 10-15% in 2011 in most markets. Vacancy pressures will escalate, which will lead to a downward push on rentals in key cities. However, the demand will remain stable. The corporate will clinch early deals to cash on favorable price conditions. Pune is the city to look for as another emerging strong corporate base – 57000 houses are sold every year due to people migrating for work.
8. What can the home buyer’s expect from Mantri Developers over next 1-2 years?
Home buyers can expect an additional 30 million square ft under development. A portfolio of high end and affordable housing
to cater to customers across the spectrum. A foray into the hospitality industry with a hotel getting operational and new hotels under development. We are starting off the 2nd Mall in Bangalore. A consolidation in Chennai, Hyderabad & Pune markets with launch of landmark luxury projects