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Tata Realty & Infrastructure Limited

The global adversity of 2020 caused volatility, insecurity, and loss of lives & businesses. The Indian real estate industry was caught in the worst stage of its cyclical movement and we witnessed the fourth bottom of the sector. Firstly, the residential segment had over 30 months' unsold inventory due to excessive speculation and disturbed project cash flows, leading to high-cost debt borrowing from NBFCs or privately. Secondly, RERA & GST implementation demanded more capital and discipline besides giving rise to “consumerism”, exposing those who did not take compliances seriously. Thirdly, the situation became even worse with the NBFC crises, causing severe liquidity crunch leading to stuck projects. Fourth, the pandemic, still being discovered. The impact is so significant that even Tier 1 developer liquidated their assets to reduce debt – we recorded nearly 4 billion US$ worth of transactions including a listing of one REIT and two to follow in 2021.

Mr. Sanjay Dutt - MD & CEO

The other segments of real estate promised growth in the office (49 million sft in 2019), warehousing and logistics (36 million sft Grade A &B), co-work (2 million sft), and data (48 MW). However, the pandemic caused Work from Home, Job losses, Fear of Job loss, Wait & Watch by Corporate, Disruption to SME, Hospitality & Travel Industry, and has impacted the real estate segments that could have helped revive the economy besides traction to the residential sector through end-user demand.

Amidst all this, you would be pleased to know that Tata Realty navigated the challenges brilliantly. The most valuable assets that we have is “our employees” and I want to acknowledge and thank each for their efforts and understanding. The physical distances and emotional drain could not stop us from taking up this challenge. We connected on Sociable, organized virtual interactions, and continued to remain focused on making a difference to the organization and adding value. Some of the major keys take away is as follows:

The residential sector has bounced back faster than expected with help from State and Central Government on various financial waivers and schemes to support the homebuyer needs. For e.g: Maharashtra and Karnataka have lowered their stamp duty rates which have led to a surge in sales in these regions. Some of the noticeable themes are:

Digitization and Technology” adaption has accelerated transformation.

The pandemic has led to accelerated “consolidation” in the real estate sector.

Work from home & office” is an accepted practice. Homes gain significance.

Wellness and celebrating lives” has taken prominence, including second homes away from the hectic city lives.

Smart & Sustainability” quotient in the design and construction is a new normal.

Tata Realty has large land banks with potential to significant residential development potential –we intend to roll out 2 million sft in FY 21-22.

The company has also focused its efforts on strengthening the commercial portfolio across the country as it gives us more scale and de-risks the business. Our commercial portfolio largely remains stable with minimal terminations (2-3%).

Some of the noticeable themes are:

The Internet allowed access to servers remotely, enabled work from home instantly.

Mobile and Enterprise applications complimented collaboration

The organization more HR-focused and offers flexibility

Occupiers & Developers collaborated to ensure employee safety and wellbeing.

Environment, Health & Safety is being complemented with wellness

We have about 1.6 Million sft. expected to get delivered in 2021. (Intellion Park, Gurugram). India's net office absorption in the calendar year 2020 is likely to be between 25-27 million sft, much higher than predicted and better than when compared to 19 million sft during Global Financial Crisis in 2009-10