21 November 2018

Table of Contents for Realty Biz

Interaction-Dr Niranjan Hiranandani, Co-Founder & MD, Hiranandani Group

We always build for the future



As Hiranandani Group, a pioneer in mixed-used township launches ‘One Hiranandani Park’in Thane, In an interaction DR NIRANJAN HIRANANDANI, CO-FOUNDER & MD, HIRANANDANI GROUP speaks about the development of OHP, the growth in Thane and the changing dimensions of the real estate market with ROHAN AMBIKE.




‘One Hiranandani Park’ (OHP) is now a reality. What are your views on the entire journey of the project- from the planning to the reality?


I have always believed that there is an ultimate purpose for everything. We have done Hiranandani  Gardens in Powai, HiranandaniEstate in Thane and other iconic projects. However during every project we challenge ourselves as to what we can uplift. So every time when we develop  a new project or a sector, we delve into what is it that we can upgrade  in terms of aesthetic , quality, facilities and convenience to the varied audiences we cater to like children , senior citizen, work populace etc. All thispre- learning isthe key areas that helps us to consider while our new planning model. The intention is to cater the customers with better to best.That’s exactly we have aimed to achieve it through  the launch of our new product offering known as ‘One Hiranandani Park’ on prime location of Ghodbunder Road, Thane.




What was the rationale behind selecting Ghodbunder Road, Thane for building this project?


Whenever we take up a project, we always look at three things— the future potential of the area. Today, most of us look at the present and work accordingly. In our case, things do not go that way. The idea is to say that 25 years from today is how your living in the building, how would you feel. So, that is really the extent to which we think. It should not be looking good today. Construction of homes or township projects is for long lasting and has a long span of timeline. In fact, it is a perennial nature. The quality of life of people living there should be the best and this does matter for us.




What were the challenges involved in the completion of the project? How did you overcome them?


Challenges always cross your paths while you tend to initiate new developments.  Challenges could be a road block in terms of  regulation, policy or clearances, labor, materials, etc which were always present.. We have through our deliverables, tried to make the most of such challenges by converting them into new opportunities to provide something more.



With concepts such as Green Building and energy conservation taking roots, have you made use of any of these in ‘One Hiranandani Park’?


If you look at our thought process, 25 years ago, we started a sewage recycling plant in Powai. Then we did the same project in Thane as well. Each of these plants is having a capacity of over 4 million liters per day today. This is far before the concept of recycling of water took place in the city and at that point of time there was no water recycling plant in the city. The essential part then was that water is precious resource and it should be re used for various purposes —flushing, gardens and other commercial purposes. We took it up on that time and then raised the bar. Now there is a lesser demand as there is no water shortage. This is because around 1/3rd of the water is used as recycled water. For gardening we have the use of recycling water. For flushing we have made use of treated water. All these projects we created brought about making it more environmentally friendly and also improving the green quality of the buildings. We have done all that in terms of efficiency and energy saving. Now the part of it has become mandatory and even the people in general are becoming aware and are being more environmental conscious. This is a fantastic thing as today as people are looking at it not just because it is partly mandatory, but in fact they have realised the need of it and have seen others doing it.




The construction of OHP has been completed well before time. Which are the factors that have contributed to the completion of the project ahead of schedule without the quality for which Hiranandani Group is known for?


We are into the real estate and construction business over 3 decades now. In this phase, we have witnessed and learned all the business cycles of the sector. As a company we always follow a clear vision to go beyond creating just living spaces.We always aimed to deliver holistic living experiencein the form of uncompromised quality product and speedy delivery with technology automation and upgradation.The company has moved to a new level of product delivery with developing India’s first IFSCtower ‘Hiranandani Signature’ in record 13 months at GIFT City, Gandhinagar and 2 mn sq. ft built to suite tower for India’s leading IT giant TCS at Hiranandani Estate, Thane. This has set the new precedent in the company about speedy delivery with acute monitoring and quality check mechanism.




You have also entered in the affordable housing sector. Can you brief us about your latest development in that sector?


Affordable housing was always present. However, now the focus area and the quantum has increased. Earlier the number of houses being constructed was lesser in number. Today the entire magnitude has changed


The quantum has gone up as a result of the quantity of the demand and the objective set by the Prime Minister under Housing for All by 2020. The government has also incentivized this area by giving infrastructure status, interest subvention, capital subsidies for housing, increased the carpet area under the PMAY scheme.


Of recently, the Government of Maharashtra has plans to build around 5 lakh houses under MHADA in Mumbai. I see a lot of demand in this segment. If one can make an affordable house, the industry in that segment will definitely grow. The growth in affordable housing is a good sign. The Prime Minister has flagged it as an objective which is a good thing and it is working very successfully. Results in the housing sector cannot be seen instantly because it takes time to construct inventory. However in the next few years you will be able to see a lot of stock coming in to the market.




You had stated earlier that affordable housing in Mumbai was next to impossible. Are you still firm on this?


Yes. I had said that affordable housing in Mumbai city is not possible as the cost of land is too high and also the additional FSI granted is at premium cost. .. We have requested the government to revise and reduce the cost of additional FSI which will help developers to build houses at reasonable rate.


If the government reduces the cost of additional FSI, it will be a new world altogether. It will surely bring down the prices in the city which today is next to impossible not because it cannot be done, it is due to the incorrect pricing. If they price it wrongly, these issues will arise.


It has been a year since the launch of RERA. How has the market responded to RERA.


The year 2017 was a difficult one as a result of the after effects of demonetisation, RERA, GST and the Insolvency act. All these had attacked the industry sequentially. This was a setback to both, the developer who was required to arrange more funding for the projects and consumer to bear hike in prices. . GST was aimed at one nation, one tax intention. But Stamp duty and registration weren’t subsumed in the GST rate and was required to pay additionally. This ultimately resulted in increase in home prices.  Act of RERA also mandated locking of 70% of fund into escrow account resulting the developers in to lurch. Now, that phase has passed and companieshave tune in to the new set of rules and regulation with aligning its accounting mechanism accordingly. However, those who have not been able to accommodate themselves with the changes that have taken place— the GST, transparency under RERA or insolvency as they were over leveraged are in trouble. 




Do you think commercial will play a larger role in your business now?


Throughout the entire country, residential will be a top priority covering around 85 per cent of the market. Commercial depends more on business expansion and growth of GDP. Today the GDP is 7 per cent, indicating the assured growth in the commercial segment with whopping demand and consumption economics. This will open up new growth locations like shift from Nariman Point to Lower Parel to BKC to Powai and now Thane and NaviMumbai.  The commercial sector will surely grow, but the direction and quantity is something which is dependent on the development there by the respective governments or by the private sector.




Where is real estate market headed for in the coming years?


I am bullish about the growth in the real estate market. As a company, we are already growing five fold in terms of project size and implementation that what we were five years ago. The pace of the growth will grow multifold but what we deliver in terms of product will be different. However, all out growth is certain.


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