PANJIM: Having entered the Goa market in 2004, Pune-based Gera Developments have grown as a brand in the local market. Rohit Gera, managing director, Gera Developments, spoke to the Herald about his company, its plans, the local market and the upcoming budget. Excerpts of the interview.
HERALD: What has brand Gera been able to achieve since you started operations in Goa?
ROHIT GERA: In the last decade, I think we have been able to shed the outsider tag or we are not perceived to be a fly by night operator. Gera Developments are recognized as the creators of premium residential and commercial projects in Goa. In fact in 2014 we have seen a jump in sales by brokers in our projects which shows the level of confidence that they have on our ability to deliver. They are vouching for us by putting their credibility on the line.
HERALD: What is the status of your current projects? Any new ones planned?
RG: We have recently launched Gera’s Imperium Grand and Imperium Green at Patto Plaza. Imperium Grand is an Intelliplex with smart features like building management systems. It is the fourth project in the popular Imperium series of commercial spaces in Panjim. The construction work has commenced and we are at approximately 60% sold.
Gera’s Imperium Green – the next generation green building of Goa was launched last year and the construction is on track. The project is expected to be completed by the middle of 2015 and approximately 80% of the units are already sold.
HERALD: How is the Goa market doing now?
RG: The overall sentiment has been quite poor in the industry. The Panjim market has been very sluggish on the residential side. When the UPA Government was re-elected for the second term the stock market and the real estate market took off together. However this time around, though the stock market has responded, the real estate market has been far more circumspect.
We believe that the real estate really has the potential to boost the economy and for that to happen we need to see a reduction in the interest rates. The reduction in the base interest rates of 25 basis points while positive will not do much to move the overall market. Though this move gives us a sense of direction and is one trigger, there is also a lot of hope that red tapism, bureaucracy and corruption will be reduced. This will help the GDP grow. If the companies perform better and salaries increase that will bode well for the overall market.
HERALD: Have the prices corrected?
RG: The prices in and around Panjim have corrected. There is also delay in purchase due to factors mentioned above.
HERALD: What is the outlook for the next 2-3 years?
RG: We think the market will pick up when the home loan interest rate effectively reaches 8.5 per cent. A lot of pent up demand will unlock and we see this happening by end of 2015.
HERALD: What can the government do to better the situation in the Goa realty space?
RG: The Prime Minister has spoken about boosting tourism and this will definitely benefit the Goan economy. We are also hoping to see the mining sector come back with all guns blazing and that in turn will be another positive trigger.
HERALD: What is your budget wishlist?
RG: We would like the Finance Minister to consider increasing deductions towards rental income to incentivize and boost rental housing in India. Also disallow long term gains on sale of property if TDS is not done at the time of purchase. This will increase compliance
The reintroduction of the NDAs provision of 80-IB(10) – Tax incentive to develop housing projects with stringent provisions will result in more supply and lower prices. We would also like the government to modify the registration act – deny registration of property if TDS Certificate and Completion Certificate are not produced. As an incentive, allow 5 year 200% interest deduction for single home buyers. It will result in a net 7 % interest boost for the industry and increase revenue. Introduction of a special residential zone on the lines of SEZ will boost low cost home supply. Existing SEZ processes can be used.
