Need to mandate certifications and ratings in real estate
Real Estate

Need to mandate certifications and ratings in real estate

Mandating certifications help only when there are uniform and standard parameters by policymakers—the building fraternity unanimously agrees that there are no certifications or ratings available in India.

“ISO certification is one that can be considered, but it comes with its own limitations,” says Dr Niranjan Hiranandani, Founder & Managing Director, Hiranandani Group and President, NAREDCO. “What has made our company stand apart from others in the market till today is our zero tolerance for quality standards from 1987. Certification is mainly for documentation but one has to deliver more than what it is asked for in documents and certificates.”

That said, the certification system can certainly bring greater accountability and transparency to the sector. As Deepak Suvarna, Chief Projects Officer-Head Projects, Mahindra Lifespaces Developers, says, “The success model of Building Construction Authority, Singapore (BCA), is an example of what can be replicated in India but there is a cost attached.” Mahindra Lifespaces has engaged an external agency to conduct assessments that are similar to CONQUAS, the rating model used by BCA, Singapore.

Mandating certifications and ratings have an added advantage for end-customers as it ensures safety, delivers eco-friendly lifestyles, provide sustainable homes and increases the overall standard of living, says Shabbir Kanchwala, Senior Vice President, K Raheja Corp. “Further, a good rating makes it easier for developers to market their homes, which additionally improves the rental yield and appreciation of return on value of the property,” he says.

Sharing his perspective, Shashi Prabhu, Founder & Managing Director, Shashi Prabhu & Associates, says, “Rating the project will be helpful, especially for 50-60 year-old buildings. These buildings require redevelopment or maintenance. It is essential for engineers to visit a site and put them in a different category.”

Meanwhile, Pradeep Jain, Chairman, Parsvnath Developers, points to agencies such as CBRE, ICRA and other patent agencies, Knight Frank and others who have taken up the role of rating projects in India—a positive rating from them goes a long way in claiming better rentals and market price.

For instance, CRISIL Real Estate Star Gradings help buyers benchmark and identify quality projects within their city. As T Raj Sekhar, Director, CRISIL Real Estate Gradings, says, “The key factors evaluated in CRISIL Star Gradings process are quality of legal documentation, construction-related risks and financial flexibility or viability of the project, besides the background and track record of the project sponsor.” To assess project construction quality, CRISIL considers structural quality, infrastructure and integrated facilities, finish, after-sales service and any likelihood of time and cost overruns. For project innovation, CRISIL considers innovations in land acquisition, construction technology, building design and project funding.

SHRIYAL SETHUMADHAVAN

Mandating certifications help only when there are uniform and standard parameters by policymakers—the building fraternity unanimously agrees that there are no certifications or ratings available in India. “ISO certification is one that can be considered, but it comes with its own limitations,” says Dr Niranjan Hiranandani, Founder & Managing Director, Hiranandani Group and President, NAREDCO. “What has made our company stand apart from others in the market till today is our zero tolerance for quality standards from 1987. Certification is mainly for documentation but one has to deliver more than what it is asked for in documents and certificates.” That said, the certification system can certainly bring greater accountability and transparency to the sector. As Deepak Suvarna, Chief Projects Officer-Head Projects, Mahindra Lifespaces Developers, says, “The success model of Building Construction Authority, Singapore (BCA), is an example of what can be replicated in India but there is a cost attached.” Mahindra Lifespaces has engaged an external agency to conduct assessments that are similar to CONQUAS, the rating model used by BCA, Singapore. Mandating certifications and ratings have an added advantage for end-customers as it ensures safety, delivers eco-friendly lifestyles, provide sustainable homes and increases the overall standard of living, says Shabbir Kanchwala, Senior Vice President, K Raheja Corp. “Further, a good rating makes it easier for developers to market their homes, which additionally improves the rental yield and appreciation of return on value of the property,” he says. Sharing his perspective, Shashi Prabhu, Founder & Managing Director, Shashi Prabhu & Associates, says, “Rating the project will be helpful, especially for 50-60 year-old buildings. These buildings require redevelopment or maintenance. It is essential for engineers to visit a site and put them in a different category.” Meanwhile, Pradeep Jain, Chairman, Parsvnath Developers, points to agencies such as CBRE, ICRA and other patent agencies, Knight Frank and others who have taken up the role of rating projects in India—a positive rating from them goes a long way in claiming better rentals and market price. For instance, CRISIL Real Estate Star Gradings help buyers benchmark and identify quality projects within their city. As T Raj Sekhar, Director, CRISIL Real Estate Gradings, says, “The key factors evaluated in CRISIL Star Gradings process are quality of legal documentation, construction-related risks and financial flexibility or viability of the project, besides the background and track record of the project sponsor.” To assess project construction quality, CRISIL considers structural quality, infrastructure and integrated facilities, finish, after-sales service and any likelihood of time and cost overruns. For project innovation, CRISIL considers innovations in land acquisition, construction technology, building design and project funding. SHRIYAL SETHUMADHAVAN

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