‘It’s Time To Show We Are Serious About Doing Real Estate Business’
Under the banner of FIABCI, the international real estate federation’s goal is to create India a global brand in the real estate segment.
FIABCI, a business network of real estate professionals worldwide, provides access and opportunity for those real estate professionals interested in gaining knowledge, sharing information and conducting international business with each other.
FIABCI boosts foreign direct investments (FDIs) in the Indian real estate sector. Under the ‘Housing for All’ project, with a focus on constructing 85 million homes for the homeless, increased transparency and reduced impediments for investors with the implementation of RERA and constant demand for high standards of commercial and retail space from multi-national corporation are positive indicators towards growth in the real estate market. Thus, it’s a huge opportunity for FIABCI to attract FDIs in all segments of the industry.
Farook Mahmood, World President at FIABCI International Real Estate Federation, Paris, recently interacted with BW Businessworld and discussed about the situation. Mahmood is the first Asian and Indian to be elected as the President of FIABCI. Edited excerpts:
What is the role of FIABCI in Indian real estate segment?
Under the banner of FIABCI, the international real estate federation’s goal is to create India a global brand in the real estate segment. With the government of India’s plan to construct 85 million homes under the social housing programme, it is an ideal environment and a huge potential for investment from multinational companies into the Indian market. Apart from this, cut in the period for long-term capital gain (LTCG) from three to two years is a welcome move. Real estate investors looking for quick exit option to switch their investments or to book profits were often discouraged by three years LTCG.
What is the impact of RERA in the segment?
It is a welcome move. It will regularize the sector and will bring greater transparency, accountability and timely completion of projects. The long-term policy change is for the rights and interests of developers, contractors and consumers. Thus, creating conducive environment for buyers as well as increased credibility in the long term will lead to higher domestic and foreign investments. The process still needs to get streamlined but it’s time to show the world we are serious about doing real estate business.
How GST impacts the real estate segment?
The GST principle, ‘One Nation, One Market, and One Tax’ subsumes all taxes. It not only minimizes the tax burden on buyers, suppliers and developers but also simplifies the process of paying taxes. Initially, there will be some teething issues but eventually it will be for the benefit of all.
How we can meet the high demand for standardized commercial and retail spaces in India?
India is already at par with international standards. What we need to bring in is innovation technology for future growth prospects. Thus, the need of hour is – ‘factory-built buildings’ for higher speed delivery, quality infrastructure and timely delivery.
How do you view the City Prosperity Index (CPI) in India?
FIABCI’s priority is to popularize the UN-CPI Index for all the cities of the world. CPI is UN-Habitat’s urban development indicator applied in over 500 cities around the world, a tool that provides metrics and data to evaluate urban development. The index contains six dimensions. It measures productivity, infrastructure, quality of life, equity and social inclusion, environmental sustainability, and governance. The aim of the CPI is to enable city authorities to identify opportunities and potential areas of intervention for their cities to become more prosperous.
What are the scope and opportunities for FDIs in real estate sector in India?
With the segment turning attractive and various proactive measures by the government to aid and streamline the segment, the Indian real estate sector has a vast opportunity for foreign investments. India is opening doors to foreign investments with tax and capital gain benefits. The industry status granted to the sector is a significant one. Permission to pay capital gains tax under Joint Development Agreement (JDA) post project completion is a significant benefit to developers. The 5 per cent concessional tax rate on interest extended for qualifying foreign debt from June 2017 to June 2020 is shot in the arm to boost foreign investment. In another step, the government will grant permanent residency status to foreign investors who meet criteria related to employment generation and minimum investment.
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