Housing in India is at the start of a 10–15-year upcycle: Abhishek Lodha

“The inflation situation is already moderating. Globally, commodity prices, at least several commodities, are now way off their all-time highs which were achieved in the aftermath of the Russia Ukraine situation in March and April of this year. At that time, there were also lockdowns in China,” saysAbhishek Lodha, MD & CEO, Lodha Group

Congratulations on the net zero urban accelerator plan and let us talk more about this. What exactly is about this launch, details that you can share up with us, the plans that you can share with us?
The Lodha net zero urban accelerator is our way of contributing to India’s journey which the prime minister has laid out to become a net zero carbon country economy by 2070.

As you may be aware real estate and its ancillary industries, and the supply chain make up almost 40% of the global greenhouse emissions. Now if a country of the scale of India is going to become net zero carbon in the next 50 years or just under 50 years, then some of the industries which are the major sources of the greenhouse gas emissions must take a leadership role.

We believe that the housing and real estate industry in India is set for a very significant amount of growth and therefore over the next 20 years if we can build these in a sustainable green friendly manner then India’s journey to become net zero carbon by 2070 will be very much possible to achieve.

With that objective we have tied up with RMI which is the world’s leading institution when it comes to developing sustainable net zero carbon-built environments and Professor Amory Lovin’s who is the founder of the RMI I am very pleased that he is joining us today for this discussion.

The objective of our accelerator will be to try out the solutions which are global, the theories, the ideas, the best practices from across the globe in the Indian context, in the fact that in India you have different climatic conditions, you have different income conditions, so we try them out in India, we try them out in a manner which allows us to quickly learn as to what works and what does not work and what requires tweaking and what needs to be discarded and then we share this knowledge very widely with all other stakeholders including the government policymakers, media, research houses, students as well as other real estate developers free of cost.

So, all the information is shared so that people know that in India what is possible and how to implement it and with this our hope is that we will be able to make the real estate industry in India move to net zero carbon by 2040 itself well ahead of the overall goal of 2070 that has been set for the nation.

Can you give the Q1 business update because very strong, larger developers are coming out with strong updates as well? Do you believe that this kind of a trend looks sustainable?
We firmly believe that housing in India is at the start of a long term, which is 10 to 15 year up cycle because the factors of increasing demand driven by nuclear families, growing incomes and job creation, easy availability of mortgages and equally importantly the fact that the home has become a much more important part of people’s lives after Covid on the demand side.

On the supply side the desire of people to only buy from the highest quality branded credible names and therefore a consolidation and a discipline in supply.

With these two factors in place, we firmly believe that housing is at the start of a multiyear up cycle, home prices will move up modestly, housing volumes will grow significantly, and we believe that housing in India will be a real driver of creation of wealth for homeowners in the years to come as prices gradually move up.

We have seen prices which have already seen an upward bias gradually so how are things when it comes to the raw material front because inflation is clearly hurting everyone, are you able to pass this on to consumers?
The inflation situation is already moderating. As you know globally now commodity prices at least several commodities are now way off their all-time highs which were achieved in the aftermath of the Russia Ukraine situation in March and April of this year and at that time you also had the lockdowns in China. Overall, we find that inflation of construction cost in India has moderated reasonably over the last three months and we expect that to be the case going forward. So yes, we watch inflation carefully but as we have shared in the data in our analyst presentations the inflation is not a substantial risk and we believe that it will moderate in the times to come.