The renewed T agitation in Hyderabad has pushed the city’s realty sector into a state of limbo yet again. If the temporary shutdown of registration offices has jeopardized cash flow in to near-complete projects in the city, the transport strike has severely hit work at construction sites. Even delivery of raw materials has also been partially affected, say builders who fear that the protest, if prolonged, can cast a shadow on their sales too.
What has added to the concern of the industry is the timing of the agitation. With the festive September-October months usually considered profitable months for the sector, developers fear that the unrest could seriously impact their annual turnovers.
“Sales have anyway been slow for sometime now. If the matter does not get resolved anytime soon, the situation will only get worse,” said Suraj Prasad Agarwal, chairman and managing director of Landmark Group of Companies (it has a realty arm called Landmark Builders), whose four projects at Shamirpet, Nizampet, Shadnagar, Uppal and Marredpally are all awaiting customers.
Even construction activity at these properties, over the last three days, has come to a complete standstill, thanks to the RTC strike. “At least 70% of my workers have been unable to report to work,” said Agarwal, expressing concern over the fate of his residential complexes.
Though the fear of failing deadlines has become a matter of concern for most of the builders, the stalling of registrations (due to registration offices being shut) is giving them sleepless nights. This has resulted in momentary freeze on bank loans, which in turn hit the ongoing work at construction sites. “Banks do not disburse the final loan amount to a customer before the property is registered. So, with registration offices shut because of the turmoil, buyers have not been able to make their last installment payments to us. This has led to a severe cash crunch,” said Anand Reddy, executive director, PBEL Property Development adding, “There are at least 30-40 registrations in my property worth a few crores of rupees that have got held up now.”
And this is true of several others who have completed more than 80% of their projects. “Close to 85% of our work is done. Since registrations are not taking place, there is a delay in delivery,” said another leading developer from the city on condition of anonymity.
Predictably, the builder community is eagerly awaiting a solution to this stalemate and feel that the industry can be revived only if the T’ concern is addressed at the earliest.
“If electricity and transport issues haunt the sector for too long, it could impact sales in the future. There is, therefore, an urgent need to resolve the Telangana crisis,” said C Sekhar Reddy, president, Confederation of Real Estate Developers Association (CREDAI – Hyderabad chapter).
Source: The Times of India, Hyderabad
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