Sea Change in the Construction Industry

An interview with Aditya Javdekar, CEO, Vilas Javdekar Developers.

Started as a real estate company in 2002, Vilas Javdekar Developers have successfully completed thirteen projects and have another seven projects underway. They have strived to make the best ‘homes in terms of user-friendly design, aesthetic brilliance, robust engineering and sustainability.

Aditya Javdekar CEO & MD, was chosen to head the National Youth Wing of CREDAI in 2015. This honour was taken with great responsibility – towards the industry, the customers, as well as the society. And as always, Aditya prepared to lead the way through example and bring in a wave of change.

Aditya with a precise and solid plan at the helm of Vilas Javdekar Developers, has maintained a track record of always delivering projects on time (and sometimes even before the promised time).

It was lovely to have had the opportunity to chat with Aditya and give us such in-depth insights into the construction industry.

What are the changes in the construction industry you have witnessed over the past 5 years?

AJ : The past five years has seen many changes in the real estate industry. The construction industry has moved from being an FSI deficit regime to a FSI surplus regime, this government both at the centre and the state have ensured that they create an oversupply of FSI. Therefore, what we used to treat as gold is now available in plenty. It has led to massive disruption of the way real estate business gets done and the investment matrix has changed dramatically.

Five years ago, as a developer the  basic strength that would qualify me as a ‘big player in the field’ would be the land that I could aggregate. Now the rules of the game have changed to delivering on time and servicing my customers with a smile post possession as well as several years post possession. In the current scenario this is what would define a good developer. There has been a tectonic shift in the mindsets of people as to who gets perceived as the best in the industry. Developers that did not exist ten years ago are on the top now bringing about a 180 degree change with some of the biggest brands going kaput!

There was a general belief with the consumer ‘if I don’t buy today I won’t get it tomorrow’ it was almost a fear. Today the consumer is more informed and cannot be hustled into buying something he doesn’t want to buy which means he will choose a developer he wants to trust in, who has a proven track record, he likes the end product he is seeing and the commitment of the developer to deliver what he is promising. There has been a huge shift in buyers to make off the shelf purchases. There is usually a very early stage buying or a late stage buying. Home buyers don’t really make investments while the project is midway.

People have started moving away from both ultra high end living spaces and affordable homes. Fringe areas have lost out in all cities across India. Fringe areas have lost out because of lack of livability index and the city centre has lost out because of extreme high pricing. So if you look at the city as a circular map, the city has shrunk a little but it has got into concentric bands where in all four directions you may have hot spots but you will have cold spots as well for real estate and that is a sure shot sign that people will buy where they want to buy and not where the developer wants to build.

Then the government induced policy changes of demonetization, GST and RERA has led to so many changes in one go that some players are finding it easier because it’s a level playing field now. It has made business more transparent and committed. Some in the industry are not able to deal with such massive shifts in the industry.  Change is always violent, and this has been the most violent change that the industry has faced over the past five years.

How has RERA impacted the real estate industry?

AJ :With the implementation of RERA, the past six months has seen a distillation process, where either developers have embraced RERA or are trying to work their way around the system. About 20 – 25 % percentage of developers have changed systems in their office to ensure the implementation of RERA, they have already seen a better traction from buyers. 70 – 75% of the developers are still in the mindset where they want to work around the law or probably break the law. They would not want to be regulated. To be more lightly put – the boys have been separated from the men.

GST and RERA has led to so many changes in one go that some players are finding it easier because it’s a level playing field now

What is the impact of GST on the industry?

AJ: GST has had no impact on the industry, there have only been teething troubles as with all new policies. There has been no impact on buyers, as GST further sets in one could see a  win – win  scenario situation for both buyers as well as developers. I as a developer will be able to collect all my input GST tax credit and pass it on which means taxation will be easier. It is just about getting used to the new system. The only thing that needs to be done is combining stamp duty with GST so that there is no multiple taxation and that will come in over the next few years. So that we go to one nation – one tax which is the spirit of the law. This is a transitionary phase for the implementation of GST. Overall GST has had no impact on the industry.



Taxation will be easier

There are many social responsibility initiatives taken on by the Vilas Javdekar group could you talk a little about ‘Happy streets’ and the philosophy behind such initiatives?

AJ :As cities grow, the happiness quotient keeps going down with traffic, pollution and congestion. The crazy speed of life going by without realizing what is happening. When you live in a big city no matter whichever part of the world many a times life just happens without you noticing. Some of us may have the luxury of taking a vacation once every couple of months but not everyone can afford an expensive rejuvenating vacation. Being a city builder I contribute to the cityscape. I build cities in my own way  while I put in structures in the city scape my attempt has been to put a smile on peoples face. Our attempt has been to create a platform  which is inclusive, non-monetary and bringing in the essence of a happy childhood. We bring neighborhoods out on the streets, as streets are typically open spaces. Open spaces are shrinking and roads are increasing so we decided to borrow space from the roads  on good weather Sundays typically in winters. We bring people together for a couple of hours where nothing gets sold or bought but people just have a good time. Each of these events see a turnout of about 30 – 35,000 people who enjoy themselves for a few hours and go back to starting Sunday with a smile. Our attempt has been to increase the happiness quotient Index in the community. We believe it is a small step and momentary too but this is what we are able to do as one developer. I am sure each developer is doing their bit, but our attempt is to build happier communities.

Suppose you are asked to develop homes for a slum development project, what would be the key elements that you would include to make it sustainable?

AJ : To bring about economic sustainability I don’t really differentiate between a small home and a slum home. In terms of design it would be maximum use of a 300 square feet space. It may be high density housing but there need not be any compromises on light and ventilation.  The focus would be on multi functionality of spaces where the house should be able to emote back to the user at different times of the day.

What is your take on Eco friendly projects?

AJ : We started in 2006 with our first eco-friendly project  which was more of a marketing gimmick, midway we realized it cannot be merely a marketing strategy. If we did it wrong then essentially we would be fooling people. Twelve years down the line all our projects are eco-friendly and it has become part of our DNA design. Being eco-friendly is essentially following good design principles. There is no extra cost or extra effort involved in the process. Our focus is on minimal maintenance, better thermal comfort, anything that reduces electricity bill. Judicious use of resources is what we strongly advocate just as our forefathers have taught us.

What are the new concepts that are coming with ecological sustainability?

AJ : Water is the biggest growing concern in our communities today. New water treatment technologies concepts of recycling water , plumbing innovations are the key areas where developers have been concentrating. Water will soon be a billable commodity and these innovations will eventually help in sustaining the usage of water.

What is your advice to homebuyers?

AJ :Many people complain about developers fleecing them, being duped is primarily the responsibility of the individual. Customers need to become responsible homebuyers, the family needs to set criteria for what they want, need to research – study survey reports , look at track records thus enabling themselves to take more informed decisions. There is plenty of noise out there in the market and the homebuyer must learn to filter out the noise and helping him/her to take well thought out decisions.

Twelve years down the line all our projects are eco-friendly and it has become part of our DNA design.
– Aditya Javdekar

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