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COVER STORY
INFRASTRUCTURE / LOGISTICS / DATA CENTERS
to
to Healthcare facility has become important factor while Healthcare facility has become important factor while INFRASTRUCTURE / LOGISTICS / DATA CENTERS
a. Warehousing, Logistics, and Data centers continue to witness
selecting an abode / Developer project. a. Warehousing, Logistics, and Data centers continue to witness
b. With all offices allowing WFH, Villas, farmhouses and second increased interest from investors with logistics accounting for
homes that offer superior social distancing and lower infection 21% of the total deal volume while Data Center investments
risk in less populated, greener environs are in demand. have started picking up with a few joint ventures announced in GUEST ARTICLE
c. Interest Rates have been at 15 year low fuelling the rush to the segment. Greater NOIDA leads the race.
buy the homes. b. Indian real estate attracted around $4.3 billion worth of
d. Inflation has dropped down to a mere 5% and the Buyers have institutional investments from entities including private equity
an advantage of buying house at 0% Interest Rate for a Home firms, family offices, pension and sovereign funds during the
Loan of say 10-to-15-year tenure. year 2021 (source ET).

DEVELOPERS CONCLUSION:
a. Larger Apartments were also sold along with Affordable a. We expect NBFC’s additional contribution than initially planned
st
segment post 1 wave i.e. from September 2020 to March for bailing out the delivery of unfinished / ongoing units. This may
2021. During 2nd wave though reverse migration was limited, mean haircut of almost all stakeholders.
only Labor & workmen staying on work sites were allowed to b. We expect to see Contractors gradually push fabrication off-
continue to work thereby limiting the productivity. site and manufacturers expand their range of prefabricated
b. Stamp Duty relief in Maharashtra helped Developers sell more subassemblies.
units. c. Contractors can scale up remote collaboration at the
c. Developers’ focus also shifted to Staff Welfare & Labor retaining Construction stages as is being done for Flush Doors and DGU
methods much contrary to pre-covid times. units etc. using a digital model or urging for minimal manning
d. With Lenders declining to pump in additional funds, a severe at site offices.
Cash Flow crunch engulfed the real estate sector post 2nd d. Distributors may need to rethink their entire fulfilment model
wave. Also as the Buyers were not getting the promised with minimal physical interactions, especially with e-commerce
product as committed, Developers’ were compelled to look models for which sales teams could work and handle customer
for additional options and hence the project delivery has been contracts, sales, or ordering remotely with digital tools.
delayed. e. Building materials manufacturers may need to ensure updated
e. Funds crunch complexity was also compounded due to RERA BIM, market access through e-commerce, as well as effective,
and Escrow Account requirements wherein the blocked funds digitally enabled remote sales.
were of no use to anyone. f. Any efforts to mitigate potential impacts by maintaining
f. The sever crunch of Regulatory and Government machinery constant communication with suppliers and manufacturers will
responsible for issuing various “CC / NOC / OC / BCC etc” also pay significant dividends. Timely identification of alternatives
resulted in delay in obtaining desired approvals for proceeding for materials and/or suppliers will ensure that disruptions will be
further. This situation has yet to come back to pre-covid levels. lessened.
g. Environmental Approvals are also hard to come by and g. All stakeholders can upskill the entire engineering & architectural
thereby delaying the Developer Cashflow and product teams along with workforce including requiring training on new
delivery during the COVID times. Only those Developers who tools and technologies (such as BIM) and operating procedures
have consolidated their Balance Sheet over a period of time etc..
(pre-COVID) have been better off. h. It is necessary to erode apprehension of the team members
and workmen regarding job security and productivity.
RETAIL & COMMERCIAL SPACES i. Contractors should attempt to building inventory, identifying
a. Due to change in Customer preferences towards shopping, backup distribution channels, and recruiting direct labor to
Retail & Commercial spaces will require some time before the replace subcontractors.
same returns back to its pre-COVID glory. j. Last but not least, it is immensely essential to remain close to
b. In addition to the effects on residential sales, the work-from- one and all stakeholders of the project so as to be fully aware
home concept also proved detrimental to the growth of office about their everchanging preferences.
space leasing companies.
c. The retail segment has been hit badly in the second phase as About the Author:
consumers are wary of visiting malls and shops. No Developer Madhav Patil, Founder, Sangam Project Consultants, has over
is thus considering reviving the Construction of Offices / Retail 30 years experience and has successfully competed Hospitality,
/ Commercial Space. Healthcare, Educational / Institutional. Retail, Commercial, Villas,
Residential & Infrastructure projects. Currently he is
MATERIAL & EQUIPMENT SUPPLIERS involved in monitoring projects for various Developers
a. Paying suppliers early has proved critical and is likely to remain in Punjab, Haryana, U.P., Delhi NCR, Tamilnadu,
more of a priority post-pandemic. Karnataka and Maharashtra. He has worked with
b. Contractors may have to re-evaluate their supply chain Gammon India Ltd., L&T (ECCG), Madhav holds
management to minimize future interruptions. qualification of B.E. (Civil), MCM (NICMAR)

FEBRUARY 2022|CONSTRUCTION OPPORTUNITIES 27