With over 25 years in the Real Estate Sector in India, Rohit Gera, Managing Director of Gera Developments Pvt. Ltd, based in Pune, India has seen the industry mature from where it was earlier. He is responsible for the day-to-day functioning of the various departments of the company as well as for the planning and execution of new projects. He also focuses on the long term growth initiatives of the company. Rohit has over two decades of experience in real estate development. He has a Bachelor of Science degree (double major in Building Construction and Project Management and Economics) from the University of Massachusetts of Amherst. Rohit Gera is also a member of the Managing Committee of Promoters and Builders Association of Poona (PBAP) since 1999. He was the Honorary Secretary from 2005-2007 and is Vice President since 2007.
Here is the interview with Team BERG
Please tell us about your journey in building Brand GERA in the Real Estate Industry in India
We have been through a number of downturns, we have seen the maturing of the markets as well. We have seen days when people would celebrate when they got a Home loan to drop in the interest rates upto 7.5 percent and a tremendous boom in the sales. So ups & downs of the sector at a time now when we are going to see a tremendous degree of change yet again. 2016 could be another landmark year and we expect to see some drastic changes as well.
What are the key trends in the industry that you have witnessed?
When I started in 1991, the entire country was in an overall crisis. Like others, we were caught in a cash flow problem and those were the early days of Gera. I pretty much took a decision at that time that we will not be caught in a cash flow problem again. We have been conservative over the years that has paid off well. The other factor that has influenced our entire approach has been the values that we have been bought up with, thinking from the customer’s perspective. Real Estate is only one asset that you buy once and keep paying for 25 years. Recognizing this as the important factor has helped our organization grow. This is something that we keep central to what we do, something like a 5 year warranty on the flats etc.
Could you recall any challenges that you faced?
We bumped into a few walls to figure out our challenge of cash flow in early days. This was very significant as this has moulded the rest of our journey. This was by far the most critical challenge that we faced and was also a big learning for us.
How does GERA see itself in the next 5 yrs time
I like to believe that people look up to us as someone who has been standing up in doing the right thing. We have not been involved in any scam or land buying or any other default. We have not had any customer default till date. While the real estate sector is disorganized to a large extent, the first thing that many developers face is delayed payments of salary staff or vendors. We have made it a practice that our staff salary gets paid by the end of every month for sure. These are small things which we believe are very important to build a healthy culture.
What are your thoughts on the Governments plan for affordable housing for all?
First of all, I don’t think this is gonna happen, its too ambitions a target. although the intention & intent is very much in place. With the way things are currently, there is a lot of joy & satisfaction in the Govt. saying that we rank 130 from 140 in ease of doing business in the country. But when you break up that rating, the sub sectors of this rating – one of the category “ease of dealing with construction permits”, out of 189 countries, we moved up to 181. We are the 181st most difficult country in the world to deal with construction permits, which is the first step in housing projects. The Real Estate Regulatory Bill, is a great idea in theory. We need legislation to protect the customer, however the fault does not lie only with the developer. There are changes required in approval process, environment rules, occupancy certificate process and many more. Unless we fix all of these, we won’t be able to bring about the change that we aim. We are only addressing only part of the problem.
Tell us about some of the ideas that Indian Real Estate Developers could adopt from other international Smart cities
Every Indian city is unique in itself. India was referred to as “developing economy” in old days. So I think if people move in first & infrastructure follows, then you are a developing economy. This also means that different cities have different challenges. In some cities rationalization of the FAR may be a solution, densification may be a solution in some cities, solving inner city issues are cricitcal to some cities. Hence there is no one solution to any city. The tax structure needs a relook. First we paid stamp duty, then along the way we are also judged as providing a service, hence pay service tax. Then the Govt. introduced VAT which is for a immovable property. To that extent can we look at reducing the stamp duty to that extent? Tax is certainly something that we need to learn from other nations. However, city specific solutions has to come in from best in class practises from different parts of the world.
What’s your advice to the upcoming developers to be successful?
Can you think fo your customer as someone who is going to buy more & more homes from you? This makes the customer as the centre of your decision making process. Since home is a one-time buy for majority of us, many developers do not put the customer at the centre of their business, which does not pay off in long term. So if we value the customer & give them the due credit in everything that we do then there is tremendous opportunity.