Don't Wait For Further Rate Cuts To Buy A Home, Says Emaar MGF VP-Sales

Though real estate in India is undergoing a stagnant phase due to a downfall in demand, the market is expected to spring back soon. In an interview with Thufail PT, Ashish Jerath, Vice-President-Sales, Emaar MGF, talks about the current market scenario and his company's future plans. Edited excerpts.

Varied property options in one location

PropGuide: Tell us about Emaar MGF and its areas of operations.

Jerath: Emaar MGF is a joint venture between Ltd and Emaar Properties PJSC, Dubai. The company has been instrumental in bringing one of the largest foreign direct investment (FDI) to the Indian real estate sector. The company started its operations in mid-2005 and has been engaged in developing master-planned residential, commercial, retail, and hospitality projects across India.

At present, we have projects in Delhi, Gurgaon, Mohali, Lucknow, Jaipur, Indore, Hyderabad, and Chennai. These projects are primarily focused on premium and luxury residential properties. We also offer mixed-use complexes.

PropGuide: What are the company's USP (unique selling point)?

Jerath: Emaar MGF has gained a worldwide recognition by providing its customers with well-planned integrated township models and the associated luxury elements. We have been able to leverage this concept by offering community spaces such as The Palm Springs, in the premium segment and The Palm Drive, in the luxury segment. We have also developed integrated commercial-cum-retail complexes near these properties, The Palm Square and The Palm Springs Plaza, both offering a great work-life balance in the heart of a growing urban market like Gurgaon.

We believe that when our customer buys an Emaar MGF property, he is assured of a superlative quality product. In the journey from purchase to handover, we make the utmost effort to ensure a positive experience for the customer. Our earlier deliveries are testimony to this. We are moving further ahead by incorporating state-of-the-art luxury features in our projects.

PropGuide: What about the buyers' preference?

Jerath: We always take into account the customer preference in terms of design and amenities, while incorporating high-tech luxury elements into our projects. We also aim at providing community spaces and eco-friendly features to enhance the living experience for the end-user.

PropGuide: What role does location play?

Jereth: Location is one of the top priorities for any buyer, while making a purchase decision. As a big developer, we have a presence across India, including some key micro markets. For instance, we have projects in all Gurgaon micro markets of MG Road, Golf Course Road, Golf Course Extension Road, NH-8, and Dwarka Expressway. We also offer buyers different property options with varied specifications in the same location.

 Gurgaon: A buyer-driven market

PropGuide: Emaar MGF has a strong presence in Gurgaon. Elaborate on the current real estate market in Gurgaon, especially the commercial segment?

Jerath: Gurgaon, over the years, has developed as premium property hub, for both residential and commercial segments. The commercial segment here has swung back into action after a subdued period. According to a report, Gurgaon accounted for 76 per cent of the overall 3.6-million sq ft leasing space in the National Capital Region (NCR) from January to June 2015, with a 20 per cent increase in the overall transacted space, compared to the same period in 2014. Without a doubt, the commercial realty market is abuzz in the city with IT/ITes companies, and e-Commerce start-ups acquiring major realty spaces to channelise their operations.

Emaar MGF sensed the huge potential that this growth-centre offered. We are now developing luxury integrated township models, incorporating office-cum-retail complexes near its residential properties. We recently commenced the possession and handover of units for The Palm Springs Plaza, an office-cum-retail complex located on the Golf Course Road. This is our third project, which we have delivered in 2015, after The Palm Square, another premium commercial complex, and The Palm Drive, a luxury residential community, both located at the Golf Course Extension Road.

PropGuide: Elaborate on the buyer profile in the Gurgaon market.

Jerath: The realty market is largely buyer-driven at present. The premium residential space has seen buyers majorly from the middle and senior management levels, aided by rising income levels. Whereas, the luxury- residential segment is governed by the business honchos and Chief Executive Officer-level executives.

The commercial space is largely taken up by information technology (IT) companies, business process outsourcing units (BPOs), and e-Commerce start-ups, having young aspirational leaders. Another segment emerging buyers is the SMEs (small and medium enterprises) graduating to bigger and better offices as they prosper in size and business.

We also have observed a definite downward shift in the average age of buyers for our properties, in both commercial and residential segments.

PropGuide: Tell us about your upcoming projects in Gurgaon.

Jerath: After delivering three projects this year, we aim to deliver our other residential projects such as Palm Terraces Select, Palm Hills, Palm Gardens, Marbella, and commercial projects such as Digital Greens, Capital Towers, soon. We are also planning to launch new commercial and residential projects in Gurgaon during 2015 fourth quarter, as we have exhausted majority of our existing inventory.

Buy when prices low or stagnant

PropGuide: What is the current home-buying scenario in India?

Jerath: The market sentiment over the past year has been a little sluggish, with demand coming primarily from ready-to-move-in and resale properties. However, this is a cyclical phase for the sector, with the developers' focus on project execution and delivery. However, this is a cause of worry, as this slowdown will have a rippling effect on the associated industries and the overall economy.

PropGuide: What is your advice to home buyers and investors?

Jerath: A lot of buyers and investors are waiting to make the purchase decision, due to the much-anticipated interest rate cut. However, we feel that such a rate cut would push demand, giving rise to an appreciation in prices. Due to this, there will not be a major impact over the home-loan lifecycle of 10-20 years with variable rates. We advise our stakeholders to make the purchase decision in a scenario, when the prices have gone down substantially, especially after a stagnation over the past couple of years.

Also, buyers should check all credentials of the developers before investing in projects, apart from other things like return on investment, delivery track records and compliance to regulatory frameworks and background check.

PropGuide: Is real estate a better investment than bonds, stock market or gold?

Jerath: Considering the current global scenario, both stock markets and gold are trading on lower levels. Real estate as an investment tool has always been a consistent asset class and has its own cyclical movements. Investment in real estate should be made during a phase when prices are down, whereas selling the property at the time of high demand and a rise in price would be an appropriate investment decision.