SBI, other lenders bullish on financing realty sector

Lenders from India and abroad on Thursday said that enough capital is available to finance the realty sector.

However, they cited that the real challenges, where the government participation is required, are in the simplification of processes, digitisation of records, lowering of taxes and a new way to find lowering of the land cost.

At a realty conference organised by the National Real Estate Development Council here, State Bank of India managing director Rajnish Kumar said the bank is quite bullish on financing the sector, especially when the last year has been a year of churn in real estate and infrastructure. "We had the demonetisation, GST, insolvency and bankruptcy code and Real Estate (Development & Regulation) Act. Besides, there has been introduction of Real Estate Investment Trust (Reit) and Infrastructure Investment Trust (InvIT). The government has liberalised and relaxed norms with regard to foreign direct investment and external commercial borrowings. We are not short of capital, and with these initiatives, affordable housing will be a reality,'' he noted.

Mike Holland, chief executive officer, Embassy Office Parks, observed that the Indian realty sector is at a real cusp and it is becoming attractive for investors. "Capital will come aplenty,'' he said.

Gautam Garg, portfolio manager, Lazard Asset Management (USA) said the introduction has Reit has resulted in the democratisation of realty market and players. "India Reits will be part of the global Reit market which is valued at $2 trillion. It is exciting not only for the Indian realty market but also for global market players to be able to have Indian Reit as an investment option,'' he opined.

Gaurav Gupta, CEO, AdaniFinserve said that the non-banking financial companies (NBFCs) have contributed quite significantly to the realty sector and they will continue to play a major role in future too.

M Murali, managing director, Shriram Properties opined that NBFCs have leadership potential for financing the realty sector.

Dev Santani, head - residential financing, Brookfield Asset Management said that a lot of capital from investors within India and abroad is flowing into the sector. "As far as Brookfield is concerned, it is doing substantial investments in the residential space considering huge potential. We have so far not looked at NBFC option but explored other instruments as in any case the realty sector needs capital,'' he added.