“We are fully committed to building Smart Townships”

David E. J. Walker
Operational since 2006 in Indian realty market, SARE Homes is an off shore fund promoted by Duet Group (a global asset and real estate management firm based in London) focused on developing residential real estate in India. Having created a strong balance sheet with properties in India valued at Rs.4,100cr, SARE's equity is held by global investors like Forum Partners and Goldman Sachs Principal Strategy (GSPS) Asia Ltd. Thisensures that the fund operates to the highest standards of corporate governance. In an interaction with Syed E. Hasan, David E. J. Walker, MD of SARE Homes discussed at length about the company's current state, future strategy, and how is it percolating belief among Indians towards the real estate. Excerpts:

How has been the pace of development for SARE Homes in India? And what is your USP?
With a strategy to develop townships on a pan-India basis, SARE Homes currently has seven projects in Amritsar, Gurgaon, Ghaziabad, Indore, Navi Mumbai and Chennai with a saleable area of 33.3 million square feet. Till the last fiscal, the group has sold 5,600 homes with a saleable area of 7.4 million square feet and has contracted construction over 9 million square feet.

SARE Home's USP lies in its established track record of offering possession in time. In fact, it is one of the first few developers to do so in Gurgaon, Ghaziabad, Amritsar, and Chennai OMR, where more than 850 families have taken possession of their homes. SARE is actively seeking to expand its portfolio across India and has gained recognition in a number of different categories and locations.

We, at SARE Homes, take pride in working to uncompromising quality standards and maintaining transparency in all our dealings. There are two parameters that make us different; one - we build what is on our brochure; two - we deliver on time. Our characteristics are efficient space utilization, quality of material, use of established architects & contractors, professional management, personalised customer interactions and more. We are also a member of CREDAI and comply with its code of conduct.

How tough or easy has been the journey for SARE Homes in India so far?
When we first entered India around eight years back, the country was in a high growth phase and there was a lot of expectations, unlike the western world. It was quite attractive at that point in time but has slowed in the last two years and demand from buyers has been muted. After the election of a stable government at the centre, the confidence in the economy has started rolling back. We expected a significant recovery in demand, but the pace is not as expected. It has been comparatively very slow to materialise. SARE is here for the long term and we have prudently managed our finances to ensure that we can continue to deliver product and meet our customer expectations. This commitment to meeting our commitments and expectations has been recognised by our valuable customers as we have recently been rated as one among the top 5 real estate brands in North India.

Springview Height Ghaziabad
Springview Height, Ghaziabad

From where do you see the potentials coming for SARE Homes?
We found that demand is more stable on the growth corridors of the tier 1 cities than in tier 2 or tier 3 locations. Also, in everything we do we seek to do to the highest standards. We find that things are a little informal in tier 2/3 locations, which make it difficult for us to compete. Our product is mainly for the middle income segment with average prices for a 2/3 BHK varies from Rs.40 lakh to Rs.60 lakh. At this price-line, we are targeting salaried people who are in their late twenties and early thirties, and are looking for modern and independent living environment. Accordingly, we are focusing on Delhi-NCR, Mumbai, Bangalore, Hyderabad, Chennai, and a couple of secondary cities with good growth and employment opportunities like Pune and Chandigarh.

What is your take on the government's recent announcements of creating smart cities? How does SARE Homes take it forward?
The Government has been very clever in capturing people's attention with its Smart City campaign. It has got a lot of people asking 'what is a smart city'. Smart Cities use information and communication technologies (ICT) and data to be more intelligent and efficient in the use of resources, resulting in cost and energy savings, improved service delivery thereby improving quality of life and reducing environmental footprint – all supporting innovation and the low carbon economy.

SARE Crescent Township
Under Constrution SARE Crescent Township ParC Sec-92 Gurgaon

At SARE Homes, we are fully committed to building Smart Townships spread across 50 to 100 acres at a time. These townships are rated Green Buildings by the Indian Green Building Council (IGBC) with energy savings of 20-30%; water savings of 30-50%; good ventilation; rain water harvesting and efficient waste treatment. The acquisition of larger piece of land provides us flexibility to develop a well-planned and secure environment. Our Townships are facilitated with very good clubs with modern sporting facilities, schools, needs-based retail, medical facilities, adequate parking, besides, large green areas and open spaces. We are building more than homes, we are building communities.

What are the major issues that are actually creating the bottlenecks? What ways do you suggest to enhance the liquidity in the financial market?
Affordability has been the major issue for aspiring home buyers. There are a number of Government regulations around land buying, followed by approvals and restrictions on floor area ratio and density norms. These together push the cost up for building homes. The Government is actively looking at these bottlenecks, which we expect to get rationalised soon so as to make the system more efficient.

SARE Club Gurgoan
SARE Club, Gurgoan

Interest rates are also very important to homebuyers as most people finance a house purchase with a mortgage. The RBI has been determined to reduce inflation in the country by keeping interest rates high. Inflation has now fallen quite significantly, and is well within the RBI target of 6%. We now anticipate that interest rates will be reduced in the next meeting. Once rates start to fall, I believe that there will be a number of rate-cuts. This will definitely cheer up the markets as financial institutions will pass on this reduction to customers. This in turn will give buyers the much needed confidence that with lower EMIs property purchases are more affordable, and that it is now the right time to go for it. This sentiment will help boost the demand and stimulate the growth in near future.

Dewy Terraces OMR Chennai
Dewy Terraces, OMR, Chennai (Actual View)

The government of India has announced quite a few policy changes recently. How do you see those measures?
No doubt that the government of India is doing a lot of good things. They are decisive and are working hard to get things moving by clearing large projects early and by simplifying the regulations by introducing single window clearing system. They are inviting 100% FDI in quite a few sectors and have announced selling of a few state-owned industries, which will make them more efficient and productive. It's really encouraging that the government is very forthcoming on these fronts and trying to do things to improve the economic stability and get it back to a high growth path.