The Hindu Business Line : Realty: High prices pushing business to smaller towns

Real talk: Mr Irfan Razack (left), Chairman- Estate South 2007 and Managing Director, Prestige Estates Projects, and Mr L.K. Tripathy, Tamil Nadu Chief Secretary, and Mr J.C. Sharma, Managing Director, Sobha Developers Ltd (centre), at the inaugural session of `Estate South 2007’ organised by the CII in Chennai on Wednesday. —

Our Bureau

Chennai, Dec. 12

Realty pricing is a critical issue that needs to be addressed as the steep increase in land cost hits operating costs across a range of industries, according to Mr Rajinikanth S. Ajmera, President, Confederation of Real Estate Associations of India.

Addressing the inaugural of Estate South 2007, a two-day conference on real estate sector and the challenges, he said that the high prices were pushing businesses to smaller towns and cities. The high cost of inputs like cement and steel was also adding to the problem. For real estate developers affordability is a key issue for the sustained growth of the sector.

The Tamil Nadu Chief Secretary, Mr L.K. Tripathy, said that industry should target inclusive growth by catering to the needs of all segments of the society. Infrastructure development is another key area where it could participate through the public-private partnership.

The State Government was focussing on infrastructure development and was keen on extending the development in the Chennai-Sriperumbudur corridor further up to Ranipet and Hosur. Private sector participation could contribute to rapid development of the Chennai-Chinglepet corridor and the Chennai-Kanyakumari road network.

Mr V. Srinivasan, Past President, CII, said government policies facilitating investments across a range of industries hold the key to real estate industry’s growth. The industry is among the largest generator of employment and contributes significantly to economic growth – every rupee invested in construction adds 78 paise to the GDP.

Real estate sector is worth over Rs 48,000 crore ($12 billion) and is growing at about 30 per cent. Residential segment demand alone is expected to be about 2,166 million square feet in the next five years.

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