In the BJP manifesto, there are at least three promises of direct interest to real estate developers. The party promises to build 100 new cities, develop a national land use policy and nationally roll out a low-cost housing programme. The promise to upgrade infrastructure and e-governance bodes well for the sector as a whole, as also for investors in property. Better connectivity will certainly boost real estate values and open up new markets for developers. This, along with the improved land use policy, will likely open up more land. The emphasis on electronic records and e-governance is likely to lead to higher transparency in property deals, increasing buyer confidence.
Affordable housingPromised policy interventions, credit availability through interest subsidies and public-private partnership (PPP) model augur well for the affordable housing segment. Among the listed players, Mahindra Lifespace Developers has been making a big push, with plans to launch a project in Boisar near Mumbai and Avadi in Chennai.
Mahindra may also benefit from the plans to create 100 new cities and emphasis on twin cities and satellite towns. The company pioneered the integrated city concept in 2002 with its Mahindra World City near Chennai. As the property market turned soft last year, IT corridors such as Bangalore remained resilient. However, if the BJP manages to turn the spotlight on manufacturing, vibrancy may return to industrial hubs such as Coimbatore, Pune and Chennai. Plans to push engineering and textile manufacturing may aid developers such as Sobha and Puravankara that have projects in Coimbatore.
The ‘Rurban’ idea of bringing urban amenities to rural areas may help Ashiana Housing that focuses on non-urban locations. But some proposals don’t augur well for the sector. The opposition to multi-brand retail is likely to have negative implications for mall developers such as Phoenix Mills. While Oberoi Realty and Prestige Estates Projects may also get hit, the impact would be lower due to higher share of residential sales.
Who wins: Mahindra Lifespace Developers, Puravankara Projects, Ashiana Housing
Who loses: Phoenix Mills