CREDAI Organises Conference on Formulation of Banking Strategy for Real Estate

CREDAI NCR, the Delhi-NCR chapter of the Confederation of Real Estate Developers’ Associations of India (CREDAI), the apex body of real estate in India, organised a conference on Formulation of Banking Strategy & the Economic Outlook for Real Estate for 2010-11 here.

The Summit covered a wide range of topics of interest to the stakeholders in the industry, providing a huge networking opportunity as well as a knowledge sharing platform for the participants to discuss and deliberate on the issues being faced by the sector and the way ahead for the same.

The conference takes place at a time when realty sector is improving, and growth in real estate is aligned to the economic growth of the country, wherein real estate is a vital contributor as residential housing alone contributes over 5% to the country’s GDP at this time. Financing is an integral part of the real estate industry and hence it is imperative that the developers and the finance institutions work closely and in mutual aid to help sustain and develop the growth trajectory of the sector. A constructive dialogue and collaborative strategies between banks and real estate developers have the potential to transform the real estate sector today and build a momentum that can benefit the economy as a whole.

Project financing is one of the critical issues in real estate today, where much needs to be done to ensure smoother operations and growth. Hence, project financing, both in residential as well as commercial realty, requires immediate attention and the conference focussed on the matter in order to arrive at workable solutions in the area.

Issues such as the difficulties in financing for projects as faced by mid and small level developers; the procedural complexities involving legal requirements, low growth rate of real estate loans in recent times; credit crunch faced by the sector heightened by the anti-inflationary measures taken by the RBI; problems faced in risk assessment of projects; and others were discussed in detail as industry stalwarts and experts in the domain shared their views and suggestions on them.

The conference aimed at providing an opportunity to understand the economic outlook and the real estate scenario in the coming year. At the same time, it sought to conceptualize a banking strategy that can address the needs of the real estate sector. Also, developing solutions so as to help generate smoother funds flow in the sector, by addressing the concern areas of both the lenders and the borrowers – i.e. the developers and the finance institutions. The conference also provided an insight to the developers and the bankers to build their portfolio strategies for the year ahead.

Mr. Santosh Rungta, President – CREDAI, said, “With the outlook on the Indian economy and the realty sector improving, it’s a good time to develop a new strategy to look at project financing for real estate in India in both the residential and commercial scenarios. We are hopeful that this initiative will be able to open new avenues for us in the area of project financing and guide us towards effective solutions for the benefit of both the bankers and the developers, eventually aiding the augmentation of the sector as a whole.”

Mr. Pradeep Jain, President – CREDAI NCR, commented, “It is essential that the developers and the financing institutions work in mutual cooperation and understand the issues and complexities involved in the processes from each other’s perspective. We took this initiative in order to facilitate comprehensive and transparent communication amongst the stakeholders so as to help develop effective solutions which would benefit all the parties involved and at the same time ensure sustainable growth and development for the industry.”

The conference witnessed participation from eminent industry stalwarts like S S Kohli, CMD - India Infrastructure Finance Company Limited; Dr. J D Agarwal, Chairman & Director - Indian Institute of Finance; Sandeep Kotak, Executive Vice President, Kotak Mahindra Bank Limited; Punit Malik, Managing Director - Yes Bank; Renu Karnad, Joint Managing Director - HDFC; Deepak Chawla, Advisor Markets - Financial Advisory Services, Ernst & Young; Shanti Ekambaram, Director - Kotak Mahindra Capital; Sunil Rohokale, Executive Director - ASK Investment Holdings Private Ltd. and Rajiv Sabharwal, Senior General Manager - ICICI Bank, among others.