Track2Realty Exclusive: The question is why have not they blocked the mutual funds then? Pranay Vakil, Chairman of Knight Frank India has a simple take, “Because the mutual funds lobby is larger than the bankers’ lobby. They could not do anything about it. The companies into mutual funds are so large; they might just foray into banking.”
Pranay Vakil: No but the same developer used to rent out commercial office space, but he won’t rent out the residence because of the return. So, according to Gaurav funding is the issue and according to Atul return on investment is the issue.
Pranay Vakil: As a developer if someone wants to come and tell you Atul that instead of borrowing at 11.5 per cent or 12 per cent, whatever the rate lender gives you, you will get this money at 3 per cent, how do you react?
Pranay Vakil: Good afternoon everyone. We are indeed sitting in one of the most interesting market of real estate when I feel the developer is confused, the buyer is confused and the government is confused.
Jhumur Ghosh: The most confused.
Pranay Vakil: You said it, I didn’t. The buyer is confused because every day he is reading in the newspapers that prices are going down, but when he goes out to buy a house he finds that prices have actually gone up. I think the lender is confused because he is lending money and the developer is making all kinds of commitment and things are not working out the way it was promised and he is unable to understand why it is not happening.
Track2Realty: After 17 long year with Knight Frank, Pranay Vakil has decided to retire. The Indian business has gone from strength to strength under his leadership, increasing employee numbers from an initial 10 to over 800 and opening 7 offices across the Country and with more planned.
Experts in the urban policy and planning are of the view that since none of the traditional solutions have worked, it calls for fresh approach and out-of-the-box thinking to make India slum free. Pranay Vakil, Chairman of Knight Frank India outrightly blames the ambiguous policies coming in the way of slum redevelopment. He says there is no dearth of expression of interest and even some of the international players had recently tied-up with the Indian partners for the same. He urges the Government for consistency in policy guidelines if slum free cities have to be a realty reality.
Pranay Vakil: The problem is when having sanctioned the loan, there is no fear of revoking it. You can change your mind because these funds are kind of committed. When engage Shapoorji Pallonji or L&T to execute a project, you enter into a contract and you say that this is how we are going to make payments. Suddenly, if you are to switch off the tap, it is going to cause a lot of embarrassment to the developer.
Atul Modak: Why did bankers’ lobby not block the mutual funds then?
Pranay Vakil: Because the mutual funds lobby is larger than the bankers’ lobby. They could not do anything about it. The companies into mutual funds are so large, they might just foray into banking.
Pranay Vakil: Kruti can you give some examples of innovative funding for the benefit of the panel? It is just to prove a point about how innovative that funding has been.
Pranay Vakil: Let’s start by introducing ourselves. I am Pranay Vakil, Chairman of Knight Frank India. We are a brokerage and consultancy group, positioned as second in the business.