“Shapoorji Pallonji is very soft footed with its clients and enables them with solutions rather than only focus on contractual agreements,” says Somshankar Bose, Deputy General Manager (Proposal), Shapoorji Pallonji & Co. Ltd.
Shapoorji Pallonji & Co. Ltd. is one of the jewels in real estate segment in India. With the real estate market getting stronger, the company is planning to invest in newer technologies as well as allows the company to invest in development of intermediaries. In a conversation with ACE Update, Somshankar Bose shares why the reductions in interest rates are going to be real “X-Factor” in real estate sector.
India and construction and infrastructure industryThe Indian construction and infrastructure industry is going through testing times as it is under immense price pressure for returns for its investors. These challenges are from new entrants, including foreign entrants and smaller companies that may not adhere to safety and quality procedures required. The biggest challenge the industry faces is severe shortage of skilled manpower, an asset required for the business.
The industry continues to lack timely enforcement of regulatory laws that enables the construction sector worldwide and it lacks several essential intermediaries like standard accepted cost index companies, licensing and certification companies for skilled and unskilled labour, certification and monitoring of government implemented safety practices, licensing and certification for various construction trades, vocational skills, certification bodies for quality in materials, manpower and execution methods and so forth. World wide, these intermediaries are the enablers for construction industry to perform with a strong foundation.
The interest rate cut, which has started to come in early this year by the RBI, will give impetus to the growth in real estate market, which is the harbinger of construction activity.
With the Modi Government looking at reforms, it is imperative that there is a focus on developing an integrated construction policy that addresses the gaps and pushes for inducing real change.
Growing Shapporji PallonjiThe expected growth from the heightened activity in the real estate market will allow Shapporji Pallonji to pursue more business and hire the much required skill sets that will guard the company against the competition. It will allow the company to invest in newer technologies required for operational efficiencies as well as allows the company to invest in development of intermediaries.
X-FactorsThe reductions in interest rates are going to be real “X-Factor” as the business depends on raising capital from the market. The reduced cost of capital can only allow the industry to look at some profitability.
Shapporji Pallonji and the industryThe market is waiting in the wings for growth and the reduced interest rates will be an impetus for this growth. This growth will be in the affordable housing market segment and value offering that is able to control costs, deliver projects on time and reduce cost overruns. Considering these market influencing factors, it is best to position the company on ability to deliver projects with a special expertise in the affordable housing market sector. The untapped market sector, which will come into effect, is the rise of investment in affordable healthcare and mid segment hospitality in Tier-2 and Tier-3 cities.
Shapporji Pallonji and competitorsIts single window offerings from design and build — including services in design, consulting, pre-construction services and finally contracting — is its unique differentiator. However, although being a part of large conglomerate, Shapporji Pallonji is very soft footed with its clients and enables them with solutions rather than only focus on contractual agreements. Shapporji Pallonji understands that its clients are also in a learning curve and is more than willing to work closely with them to define and deliver their requirements.