Niranjan Hiranandani School Of Management & Real Estate Organises 2nd Edition Of Its Flagship Real Estate Conclave: ‘Real Estate In A VUCAFU World’

Niranjan Hiranandani School of Management & Real Estate (NHSMRE) under the aegis of HSNC University, Mumbai organised the second edition of its flagship annual Real Estate Conclave. The theme for this year’s conclave was ‘Real Estate in a VUCAFU World’. The Conclave  brought together industry experts, policy makers, academia and students to explore the evolving dynamics of the real estate market in a world characterised by the military-inspired VUCAFU (volatility, uncertainty, complexity, ambiguity and fear of the unknown) framework. The Conclave was graced by Mr. Bhushan Gagrani, Brihanmumbai Municipal Corporation (BMC) Commissioner; Mr. Niranjan Hiranandani, Provost, HSNC University; Col. Dr. Hemlata K. Bagla, Vice Chancellor, HSNC University & Director, NHSMRE; Mr. Shobhit Agarwal, MD & CEO, Anarock Capital Advisors; Dr. Charla Griffy-Brown, Director General, Dean & Professor of Digital Transformation, Thunderbird School of Global Management, Arizona State University; Mr. Pankaj Kapoor, MD, Liases Foras; Dr. Ajay Desai, CMD, Spark Group and Mr. Gautam Chatterjee, Former Chairman, MahaRERA. 

 

Held at the Worli Campus of HSNC University, the Conclave focussed on the challenges and opportunities the real estate sector faces in an increasingly unpredictable environment. Experts discussed how volatility driven by shifting demand and supply factors, from e-commerce-driven logistics requirements to urban redevelopment projects, is reshaping real estate dynamics. They emphasised the need for the sector to adapt quickly to market changes, suggesting that volatility, if managed well, can foster resilience and innovation. The real estate sector is susceptible to business cycles and disruptive black swan events. In short, VUCAFU (Volatility, Uncertainty, Complexity, Ambiguity, Fear of the Unknown) is inherent to the thriving sector.

Speaking at the inaugural session, Dr. Hemlata K. Bagla deliberated on the theme for the Conclave. A noted authority on nuclear radiochemistry, she drew an interesting parallel between the uncertainty principle in quantum physics and the real estate market in a VUCAFU world. She referred to Werner Heisenberg's principle, which states that we cannot precisely know both the position and speed of a particle simultaneously and used it to explain the trade-offs and uncertainties in the real estate market—just as in the uncertainty principle, focusing too much on one factor (e.g. price or location) can limit our understanding or control over other factors (e.g., market demand, fluctuating interst rates, prices of steel, policy changes, changes in Taxation or development speed).

Dr. Niranjan Hiranandani shared his experience of developing a 16-storey commercial building at GIFT City. He explained that it typically takes around 2.5 years to complete such a project in Mumbai. However, when the project was proposed, Prime Minister Modi told him to complete it within 12 months and inaugurate it in the 13^th month. Dr. Hiranandani revealed that not only did they meet this ambitious timeline, but they also applied the same accelerated process in Mumbai, which significantly sped up their work. He recounted his early challenges with Mumbai’s infrastructure, which inspired him to develop Hiranandani Gardens in Powai. He transformed barren quarry land into a self-sufficient township, complete with well-constructed roads, efficient drainage systems and abundant greenery.

During an engaging Q&A session, Dr. Hiranandani responded to a wide range of questions, covering topics from work-life balance to the challenges of real estate development to IPO plans to investment in real estate, sharing insights from his own experiences and providing valuable advice on managing both personal and professional responsibilities. Dr. Hiranandani emphasised that buying a house is both an investment and a way to secure your future, regardless of location. He advised evaluating affordability, arranging a down payment and committing to a manageable EMI plan. He shared a common guideline, suggesting that the value of a house should ideally be equivalent to five years of your annual income, with the loan paid off over 20 years. For example, if the house costs Rs1 crore, your annual income should be around Rs20 lakh, offering a practical benchmark for affordability and long-term financial planning.

Chief Guest Mr. Bhushan Gagrani emphasised the role of infrastructure in Mumbai's status as a prime investment hub. He also gave a bird’s eye view of Mumbai's burgeoning real estate market potential. Mr. Gagrani highlighted key infrastructure projects in Mumbai, emphasising the importance of both visible and invisible infrastructure. He mentioned seven Sewage Treatment Plants (STPs) set to improve quality of sea water around Mumbai by 2028. He also discussed the BMC's road management, with plans to concretise 800 km of roads over the next two years, reducing issues like potholes and waterlogging. Furthermore, he addressed the challenge of utility upgrades during redevelopment and the need for better coordination with utility providers. Mr. Gagrani also touched on upcoming projects like the metro rail project, Gargai Dam, desalination plant, coastal road and East-West connectivity improvements.

Mr. Gagrani aptly concluded his keynote address with Donald Rumsfeld’s famous quote on "unknown unknowns". He emphasised how urban planning and real estate, like many areas of governance, is fraught with unpredictability. While some challenges are foreseeable, there are always unforeseen issues that may arise, which could significantly impact the development and management of the city's infrastructure. By invoking Rumsfeld’s concept, he underscored the need for flexibility and preparedness in addressing the evolving complexities of urban growth and development.

Mr. Shobhit Agarwal while discussing ‘Blue Ocean Strategy for real estate’,touched on creating new market spaces where competition is minimal by offering unique value propositions. This approach in real estate could involve identifying emerging trends and niche markets, such as developing underutilised areas, incorporating innovative building technologies, or creating specialised properties that cater to evolving consumer needs. By tapping into these "blue oceans," real estate developers can differentiate themselves from saturated traditional markets, fostering growth and profitability in less competitive spaces, ultimately leading to long-term success and sustainability in a dynamic market.

He explained how VUCAFU presents a significant challenge for real estate developers today. Once a strategy is set in motion, particularly with large investments in materials like steel and iron, developers face limited options if that strategy fails. Real estate is a highly localised business, with each city and micro-market having unique characteristics shaped by factors like demographics, employment patterns and socio-cultural practices. What works in one city, like Bangalore, may not be applicable to another, such as Mumbai or NCR. Since homes are designed with the future in mind, it's essential for both developers and homebuyers to align on future needs and expectations to ensure the properties remain relevant and successful in the long term.

The post-lunch interactive sessions delved into uncertainty surrounding shifting customer expectations, regulatory changes and technological advancements, stressing the importance of innovation in customer experience and the growing reliance on technology in real estate development. With complexity rising due to operational and market factors, stakeholders highlighted the need to navigate the changing landscape with strategic foresight. The Conclave also focused on ambiguity, addressing the evolving nature of regulations, processes and customer demands.

Mr. Pankaj Kapoor discussed urban evolution driven by markets, people and products, emphasising migration's role in urban growth, especially due to employment opportunities. He explained how property prices decrease with distance from the Central Business District (CBD) and drew attention to the challenges of older areas with poor infrastructure. He addressed affordable housing issues, noting rapid housing demand outpacing infrastructure development. He also discussed the high costs of land and property, particularly in developing nations. Mr. Kapoor suggested shifting economic hubs closer to residential areas, decentralising urban structures and implementing policies to create sustainable, affordable urban living, particularly in cities like Mumbai.

Mr. Ajay Desai pointed out the transformative impact of Cluster Redevelopment and the introduction of DCPR 2034 on Mumbai's urban planning. He emphasised the importance of enhanced FSI and TDR for both cess and cluster developments, which enable more efficient use of land while fostering sustainable, inclusive cityscapes. He noted that the new regulations, such as the increase in permissible building heights and the integration of technology for faster approvals, are pivotal in reshaping Mumbai's skyline. He underlined that the transition from the outdated DCR 1991 to the modern DCPR 2034 represents a significant step towards making Mumbai a more livable, equitable and resilient city.

 

 

Mr. Gautam Chatterjee, Former MahaRERA Chairman, Chief Guest for the valedictory session, hailed RERA as a landmark legislation aimed at addressing issues of the unregulated sector and spoke about the role of the regulator, successes and challenges in the implementation of the Act and also its friction with other laws such as National Company Law Tribunal (NCLT). The bureaucrat explained that a landmark legislation like RERA sets objectives that are realised over time, addressing issues such as information asymmetry, project delays and the trust deficit between homebuyers and developers.

The sessions accentuated how even the most seasoned developers today grapple with uncertainty over how future real estate products will evolve. This underscores the need for a structured approach to engaging with prospective homebuyers. Techniques like ‘Need Gap’ and ‘Pain Point’ analyses help developers tailor products to market needs. Customer engagement is key to customising real estate products to specific markets. For instanbce, areas like Hinjewadi, home to many young IT professionals, require distinct planning compared to places like Faridabad. Larger developers often have in-house teams that understand these nuances, while smaller players may face difficulties entering new markets. Today's buyers are highly informed, with distinct preferences and changing lifestyle needs. Technologies like dishwashers and app-based transportation have become commonplace, impacting design choices like parking space allocation. Developers need to collect and analyse feedback proactively to ensure their products align with future demands. Understanding these shifts is crucial for developers, investors and financiers to mitigate risks and create future-ready homes in an uncertain market.

 

Experts concluded that to thrive in this VUCAFU world, the real estate sector must foster agile leadership and adaptability. The Conclave ended with a call to action for real estate leaders to embrace new technologies, customer-centric approaches and innovative business models to stay competitive in this rapidly changing landscape.

The conclave also had a fun real estate quiz round by Mr. Hoshaang Gotla to test the knowledge of the students and winners were awarded interesting spot prizes.

 

 

Dr. Rajesh Mankani, HOD, NHSMRE & Convenor of  the Conclave, delivered the vote of thanks.  The annual conclave has been conceptualised by NHSMRE to harness the power of the young generation to bring a fresh perspective to the real estate industry.

Published on: Thursday, February 20, 2025, 12:09 PM IST