Deep Impressions

  Why is real estate regulation caught in a time warp? The challenges faced in real estate regulation are not limited to the trends in the virtual world. The marketplace in the real world, too, is demanding that regulation be more nimble, more agile, and more forward looking  (  Also, published today in  moneycontrol.com )                - - - - - - -  - - - - - - -  - - - - - - -  - - - - - - -  - - - - - - -  - - - - - - -  - - - - - - -  - - - - - - -  Parliament sessions, including the February 1 Budget session, have been largely silent on changes in taxes, as well as regulations with respect to real estate. However, as more activities in these areas go virtual, regulation and legislation may need to keep pace. Classes to conferences and currencies to campaigns are now more prominent in their virtual avatars. Though real estate and the homes we live have not become virtual, as more things go virtual regulation in the real estate sector will start appearing more jarring.    Any real

      Safeguarding Indian Realty from Evergrande phenomenon     All published in The Print   While the above issue does raise concern, however,  before one addresses the above, a more fundamental question needs to be answered : “Why do developers end up borrowing more than they can chew ?”   And the answer lies in the structural uniqueness of real estate business.     1.       Capital requirement remains unpredictable     A developer typically plans his funding through three sources :   ·        Own equity ·        Borrowings from banks etc. ·        Customer Advances      Owner’s equity has physical limitation, bank borrowings too are limited by regulatory norms. Since customer advances remain unpredictable, financial closure quite often remains a puzzle.  Further when  the projects gets completed, developer’s capital requirement comes down significantly, therefore, developer would prefer capital that can be repaid after the project.    To address all the above concerns, developers en

Telecom and Real Estate : A strange case of similarities     अति रूपेण वै सीता चातिगर्वेण रावणः। अतिदानाद् बलिर्बद्धो ह्यति सर्वत्र वर्जयेत्।।     Extreme beauty of Sita,  Extreme haughtiness of Ravana,  Extreme charity of Bali  were the cause of their troubles.  Therefore, extreme is prohibited everywhere.     ~ Chanakya Neeti (Chapter 3, Shloka 13    )     The summary of the above i.e.  Ati Sarvatra Varjayet    (extreme is prohibited everywhere), has brought two sectors with no commonalities – Telecom and Real Estate – on the same table. The differences among these are, of course, very obvious. The former, being technology driven, represents the modern and experiences things moving at the speed of light    Real Estate represents the old and is slow in reacting to events. If Telecom costs are about a small monthly charge and Real Estate purchase is about biggest expenditure in one’s life. Differences are so much palpable that according to a few analysts the two are set at cross purpos

    Urban Realty : From Crowd to Cloud     Also published in  moneycontrol.com   Idea in brief : Agriculture economy lasted millenniums, industrial economy for centuries, and within decades of service economy dominance, we have the cloud economy.  The birth of cloud economy has interesting implications for all those connected with real estate sector        ---------------- ---------------- ----------------     ---------------- ---------------- ----------------     One hectare land :   …..When used by Agriculture employs 10 people    ……When used by Industries, employs 100 people   ……When used by Service economy, employs 1000 people     With migration of jobs across sectors, the workplace has secularly been getting densely crowded. However, the new movements called WFH ( Work From Home) and WFA ( Work From Anywhere) have suddenly turned the workplace from    ‘Crowd’ to ‘Cloud’. And this disruption has bought about several interesting nuances :    ·        Agriculture sector remained dom