1) What is your overall view on the real estate sector ?
India’s real estate sector has faced momentous challenges – demand concerns, demonetization, real estate regulations and supply side issues – over the past few years. India’s real estate sector is going through a sea change with the introduction of real estate regulations (RERA) and GST implementation. Demonetisation has also been disruptive for the sector already facing a significant decline in demand. While these changes had a material impact on launches and demand, we expect transparency to improve materially going forward and believe that these reforms are good for the long run. This will not only lead to higher consumer confidence but also weed out unorganised developers.
While there were minor hickups during the first quarter of the year, things seem to be clearer and we are sure that the sector would end the second quarter on a high. It is noteworthy that the affordable housing space has grown considerably over the last few months across all major metros while the mid and luxury segment growth remained flat. It would be imperative for the real estate sector to pick up considering the overall gamete of the Indian Economy. We have witnessed enquiries increasing across most of our projects and it is only a matter of time that these enquiries get converted to a sale.
Today, we have a Government with a clear mandate who has put development as its prime agenda. It is really encouraging for developers like us to see things move at a much brisk pace than earlier. It is only a matter of time that the good old days of real estate will return which would only boost our economy further.
2) What is your take on current governmental policies like GST and RERA on the sector?
While there were minor hick-ups in the initial phase, things seem to have picked up and the impact has been hugely positive. Our customers seem to be more empowered thanks to the rollout of RERA and it is clear that this would weed out unorganized players from the industry. We see the industry to become more transparent and would significantly boost investor confidence as well. The enquiries have risen significantly in the second quarter and site visits have also increased. We are confident that the cycle will be completed. We at Sumer are hopeful of registering all our properties under RERA.
As far as GST is concerned, it has subsumed VAT and service tax on property transactions while keeping stamp duty and registrations out of its ambit. The transaction rates have increased 5-6% to 12% which will be marginally offset by high input cost credit. It is highly important for the consumers to understand the concept of input cost credit which they stand to gain in this GST regime which otherwise would make consumers feel that they would have to shell out more for their dream house in a city like Mumbai.
The important thing to note is that affordable housing-labour cost is GST exempt. Under GST, services provided by way of pure labour contracts of construction, maintenance or alteration of a civil structure or any other original works pertaining to the beneficiary-led individual house construction/enhancement under the Housing for All (Urban) Mission/Pradhan Mantri Awas Yojana (PMAY) has been exempted (4% of property value). Developers will have to eventually pass the benefit of lower labour cost to end user, though more clarity is expected on this front.
Everything put together GST and RERA has empowered consumers more and making buying decisions more simpler with little chances of getting duped by any unorganized players.
3) Brief us about the journey of Sumer Group and its ideologies?
Sumer Group was founded in 1965 by Shri Sumermalji H Shah and till date successfully completed 30 million square feet of land under development. The company believe that people always come before business and that good guys can finish first. Sumer Group’s success motto is Always deliver what you promise. It is the integrity and honesty that the company trust on and thus has been able to become one of the most trusted realty names today.
Every Sumer project involves a highly skilled and experienced team of Architects, Site Engineers, Contractors, Supervisors, Chartered Accountants and other domain experts. Together, they enable us to create spaces renowned for their modernity and premium standards.
Sumer Group believes in teamwork, innovation, professionalism, and long-term decision-making.
4) Brief about your projects across India?
The Group has delivered more than 30 mn sq. ft. of residential and commercial space in Mumbai, Goa, Alibaug and Indore. The company is developing 10 projects with 5 mn sq. ft in the above-mentioned cities. The luxury properties that the company is developing are Sumer Trinity Vertical at Prabhadevi, Harbour Heights and Harbour Centre at Mazgaon, Avenue 54 at Santacruz in Mumbai region. The company is also developing Row Villas and residential apartments in North Goa
The Group has also been highly active in the slum rehabilitation scheme (SRA) space mainly in Chandivali, Mumbai, whereby the company generated large quantum of TDR which has been sold to various developers in Mumbai. The total revenue generated from TDR sale up to date is Rs. 1,000 crores.
5) What is the vision of Sumer Group?
Sumer Group’s vision is to build landmarks where people can build the milestones of their lives. We want to be preferred choice by customers seeking a better and healthier environment for families. We believe in the principles of safer construction and good design, knowing that successful projects depend on their mastery and the application of best practices.