Jitu Virwani speaks on NDTV Prime

Watch video: https://www.youtube.com/watch?v=9BWBQNuMZ0o

Video Transcript
Welcome everyone to our Realty debate on Bangalores Property Market. 4OO out of worlds 5 ! "ortune
5 compan#es #s based out of Bangalore. $%e #ncome of Bangalore #s est#mated to be & percent %#g%er t%an
t%e nat#onal average' so #t #s clearly a market to be observed and to keep a close tab on. $oday we w#ll get
you t%e real#ty of Bangalores Real (state Market. W%at #s t%e pr#ce trends' w%at #s t%e demand and supply
s#tuat#on' #s Bangalore turn#ng more #nto a lu)ury market t%an an affordable one* $o talk on all of t%at' +
%ave w#t% me Bangalores top 5 developers w%o redef#ne t%e c#tys skyl#ne.
Jitu Virwani, CMD, Embass !roup
M,-.et me start w#t% a cur#ous observat#on and a good one too. $%e most glamorous %oard#ngs from t%e
a#rport to t%e /B 0#ty are all or atleast 123 from real estate compan#es. $%e market seems to be look#ng very
robust. $%e f#rst 4 mont%s' t%ere %avent been many new launc%es. Were t%#ngs look#ng a l#ttle slow before 4
mont%s* 5o you agree w#t% t%at* 6s #n old pro7ects werent sell#ng as muc% as t%e newly launc%ed ones. Was
#t t%e rat#onal pr#c#ng* +n all of +nd#a t%ere was a certa#n amount of d#stress #n t%e real estate market. 5#dnt
t%at bot%er t%e developers*
8#tu 9#rwan#- $%e w%ole #mportant t%#ng #s t%at #n Bangalore over t%e years we %ave %ad only genu#ne buyers.
We dont get people or + dont t%#nk any of us get people w%o buy a tower of res#dent#al bu#ld#ngs from us
and t%en try to resell #t' or buy a few floors. $%ey are mostly genu#ne buyers and l#ke +rfaan correctly sa#d
people want to pay over a t#me because t%ey are buy#ng #t for t%e#r own use' we +nd#ans l#ke to save a lot' so
you buy an apartment for your daug%ter' t%en you buy for your son' t%en you buy a second apartment for
your daug%ter w%en you %ave some more money. People l#ke to pay #n #nstallment. 6lso t%e cru) #s t%at t%e
last part of t%e market #s t%#s m#d!segment' w%#c% #s #n Bangalore r#g%tfully. + dont t%#nk t%at we %ave some
sort of a cartel' but by default we pr#ce our products muc% better t%an everybody else #n t%e country. +ts not
%#g%ly pr#ced' or as t%e market moves up' t%e pr#ces dont go up #n Bangalore so fast as #t goes up #n ot%er
parts and t%en #t slows down.+ t%#nk t%at also plays an #mportant role' because Bangalore #s a stable market.
M,-On t%e move by RB+ to cap affordable budget %omes #n t%e 5!45 lak%s range. +s t%#s a pos#t#ve move.
8#tu 9#rwan#- $%e pr#c#ng of t%e lu)ury segment %omes #n Bangalore #s at a med#ocre level t%an some of t%e
c#t#es and everyone of us %as a t%res%old of %ow muc% lu)ury can we sell.
M,- 4.1 0rores #s lu)ury #n any c#ty Mr 9#rwan#:
8#tu 9#rwan#- But #f you look #n c#t#es l#ke 5el%#' or 4.1 crores #n Bombay' t%at k#nd of a flat people 7ust need to
buy' t%e buy#ng capac#ty #s muc% better.
M,-;#ve us some growt% corr#dors' w%at are t%e growt% corr#dors for m#d!segment budget %omes* +s 35 kms
from t%e c#ty center good connect#v#ty areas' w%at do you t%#nk Mr.9#rwan#*
8#tu 9#rwan#-+ t%#nk #n Bangalore' t%ere are smaller c#t#es' so everyw%ere you put a market' t%ere #s strong
growt%.
M,-6re t%e pr#c#ng #n budget segment #n Bangalore set to grow <!<5 percent #n t%e future as well* 6nd
w%at about t%e lu)ury segment' w%ere #s #t set to go* 8une %as seen a b#g spurt #n t%e growt% #n t%e lu)ury
market.
8#tu 9#rwan#-$%e lu)ury market #s =u#te strange. +t all depends on t%e =ual#ty of development you do. $%e
people w#t% t%at s#>e of money w%o are w#ll#ng to buy are mostly #n Bangalore because t%e standard of
development #s pretty %#g% and peoples e)pectat#ons are =u#te %#g% #n terms of =ual#ty product. $%ey are
w#ll#ng to pay a pr#ce #f t%e locat#on #s good and aga#n as + ment#oned earl#er' luck#ly most of us %ave
controlled t%e pr#ce r#se #n t%e lu)ury segment #n a very slow and gradual manner' so you know we would
rat%er sell 1 apartments t%an sell 1 apartments and 7ack up t%e pr#ce to a very %#g% level w%#c% becomes
unreac%able as #t %appens #n most c#t#es.
M,-6bout t%e Off#ce Parks space' w%at #s #t t%at attracts 0orporates to Bangalore real estate* +s #t t%e =ual#ty
of t%e space offered and %ow muc% more attract#on of t%#s sort w#ll you see* W%at #s t%e outlook on
Bangalores off#ce space* Off#ce space f#gures'#f you look #n t%e f#rst =uarter #n 1<4' absorpt#on of off#ce
space #n t%e Bangalore market %as gone up by < percent w%en compared to 1<3. ?ow long w#ll t%ese
astound#ng f#gures cont#nue. 8#tu 9#rwan# could you please start w#t% t%e off#ce space market and tell me
w%ats been go#ng on*
8#tu 9#rwan#-+f you go to t%e start#ng of t%e software movement w%#c% began #n Bangalore and typ#cally t%e
ava#lab#l#ty of t%e =ual#ty eng#neers #n Bangalore #s muc% %#g%er' t%oug% even t%ey come from all parts of
+nd#a. +f + l#ved #n Patna' and + got a 7ob #n Bangalore' + would love to come and l#ve #n Bangalore because +
already %ave a lot of fr#ends %ere and t%e attr#t#on rate over %ere to go around look#ng for more compan#es to
move around #s muc% %#g%er %ere. $%ere are more compan#es %ere' t%ere are more opportun#t#es' w%#te
collared 7obs %ere are more stable and t%e number of eng#neers %ere are =u#te %#g% so t%at@s w%y t%ere #s a
growt% #n t%e %ous#ng market also. 0ompan#es f#nd #t very easy to e)pand #n Bangalore for t%e#r new
bus#nesses and to get good people.
M,-6re you %appy w#t% t%e #ncrease #n t%e rental lease t%at you %ave seen*
8#tu 9#rwan#- Obv#ously not' we want more: But t%e one good t%#ng about Bangalore %as been t%at t%e
Aoftware market #s related to t%e t#mely complet#on' %and over' occupancy' power' water w%#c% + t%#nk to
some e)tent #s =u#te eff#c#ent #n Bangalore' so you can t#me #t. +f + were to go and bu#ld a bu#ld#ng #n some
ot%er c#ty' + would be wary of gett#ng my bu#ld#ng or product ready and + w#ll %ave to face penalty from t%ese
compan#es. $%at %as made lot of t%ese compan#es come back to Bangalore' w%ere developers can prom#se a
sc%edule and st#ck to t%e#r sc%edules and del#ver bu#ld#ngs on t#me.
6nd aga#n t%e attract#on about t%e weat%er %ere. "or love or money you cant get t%e k#nd of weat%er you
get #n Bangalore #n any ot%er parts of t%e country:
M,-W#ll t%ere be a t#me w%en t%e pr#c#ng #ncrease w#ll make #t an e)pens#ve market or #s t%at =u#te far away*
6nd on t%e trend for M, 0s to buy off#ce space #nstead of leas#ng*
8#tu 9#rwan#- $%ey %ave been #n t%e country long and t%ey are comfortable't%ey %ave t%e conf#dence #n t%e
c#ty of Bangalore. $%e 6ccount#ng system #n t%e /A %as c%anged. Bou see' rent %as to be now cap#tal#>ed.
(arl#er t%ey %ad t%#s system of e)pend#ture and revenue. But now t%ey t%#nk t%at m#g%t as well #n t%e long
term buy and %old #t. Ao you know' you need to as a developer be fle)#ble' some of us love rent#ng' some of
us love sell#ng and t%en you %ave a comb#nat#on. Bangalore %as bot% a rental and a log#st#cal advantage.
M,-,e)t about R(+$' e)c#ted about #t* (mbassy and Blackstone' #s somet%#ng t%at everyone #s speculat#ng #t
w#ll %appen. W#ll we see t%e f#rst R(+$ #n (mbassy and Blackstone* +ts a po#nted =uest#on t%oug%:
8#tu 9#rwan#- + am also t%ere #n #t and + am always e)c#ted. R(+$ #s somet%#ng t%at we as a company %ave
been attempt#ng. Of course you w#ll all want to know of t%e f#rst deal' #n terms of value' we w#ll also benef#t
#n be#ng t%e f#rst R(+$. 6nd our a#m w#ll also be to do t%at' but from 1& as a company we %ave been
look#ng at a R(+$' w%et%er #t was #n A#ngapore and %op#ng t%at some regulat#ons would come up #n +nd#a. 6nd
about 1 years back we dec#ded t%at +nd#a would be t%e r#g%t place to actually do t%e R(+$ t%an rat%er go to
A#ngapore' and t%ere #s enoug% money w#t%#n t%e market' t%ere #s no e)c%ange r#sk. 6nd t%e only benef#t you
get #n A#ngapore #s t%e arb#trat#on of borrow#ng' but t%#s w#ll be a muc% safer growt%' muc% safer market to
be #n. 6nd #t looks l#ke t%e government #s mov#ng =u#te fast at t%#s pace.
M,-W%at are t%e k#nd of R(+$ y#elds we are look#ng at* +snt C to < percent =u#te low*
8#tu 9#rwan#-6nd go#ng forward t%#nk of t%e growt% plan. $%e growt% on #t. C to < percent #s a good y#eld to
start of w#t%' t%en t%e escalat#on k#cks off. $%en t%ere are locat#on c%anges' Many of us %ave locat#ons w%ere
we %ave tenants pay#ng rent' anot%er tenant pay#ng l#terally 3' 4 or 5 percent' somet#mes even D
percent more rent' and #n a span of 5 to 4 years' a new tenant. $%ere #s a lot of growt% w%#c% w#ll play an
#mportant role #n t%at k#nd of t%#ng.
M,- Ao you t%#nk R(+$ w#ll work as a product #n +nd#a*
8#tu 9#rwan#- /ndoubtedly. +f somebody l#ke you wants to #nvest' #ts a %edge aga#nst #nflat#on. Bou cant get a
p#ece of act#on or real estate growt% #n +nd#a on a small p#ece of land ot%erw#se.
M,-Because Bangalore #s grow#ng all around leav#ng as#de t%e West part' +s land go#ng to be an #ssue for
your growt% plans Mr.9#rwan#*
.and #s certa#nly not go#ng to be an #ssue' as t%ere #s lot of land ava#lable and #nfrastructure #s also grow#ng'
l#ke every c#ty #n +nd#a' #t needs development and we are %op#ng t%#s government can %elp us' s#nce t%ey got
ma7or#ty power. 6lso #f you look back t%e years' Bangalore 5evelopers about <5 !1 years back on wards #n
t%e#r small way %ave taken t%e respons#b#l#ty of develop#ng certa#n roads' ma#nta#n#ng certa#n roads. $%ey
%ave t%e ab#l#ty to spend on t%e place. 6nd #n a lot of ot%er c#t#es developers say #t #s t%e governments 7ob.
/nl#ke t%at' #n Bangalore a lot of developers %ave bu#ld t%e #nfrastructure w#t%out batt#ng an eyel#d' because
t%ey t%#nk #t #s conven#ent for t%em and t%e#r people. Ao people are spend#ng crores of rupees do#ng #t. +
mean #n our w%ole credal' many spend so muc% to #mprove access#b#l#ty' be #t me or 8a#s%ankar or +rfaan.
$%ere was t%#s survey some t#me back t%at sa#d an average Bangalorean #s ready to pay more ta)es to get a
good =ual#ty of l#fe' and better =ual#ty of transport.