The engines of global economy are gradually coming out of the shadows of Covid-19 and all-round efforts are being made at various levels to mitigate the impact of this global pandemic. In past few months, multiple global investments, strong supply chains, innovative manufacturing, redesigning of spaces, technological advancement has been visible within the Indian real estate sector, making it more resilient. The government has been focusing on developing a ‘self-reliant’ India by leveraging the strength of the country’s domestic demand.
It is an opportune time for Government entities and Public Sector Undertakings (PSUs) to utilize their real estate holdings to raise funds and generate sustained cash flows that can help in meeting fiscal targets. Government entities can potentially look at listing their real estate holdings and prioritize their assets, ensuring clarity in immediate term targets and projects that can be taken forward expeditiously.
The PSUs and other govt. entities can also collaborate with real estate developers to develop quality public assets in the country, which in turn can create a multiplier effect on the overall economic growth. Partnering with experts would ensure sustainable development and quality infrastructure development in country.
Process of Monetising the Assets
The first step towards monetising the assets include getting a clarity on all the assets owned by the stakeholders and then making sure that all the legal paperwork associated with the holding, such as title deed, transfer papers, property documents, etc. are in place. The next step involves a study or a comprehensive assessment of the holdings that will ascertain the value of the asset class in the current scenario. This helps in maximising revenues and get better returns.
For monetizing land assets of PSUs, the government must consider various options, including sell and lease agreements or opt for the real estate investment trust (REITS) route. Government entities should periodically assess the prevailing real estate dynamics and legalities in different regions depending on their real estate holdings. This helps them get a better market understanding and make an informed decision towards effectively using their holdings.
One of the prime issues faced by PSU's is the lack of internal policies, operational manuals/ handbooks, etc. regarding the asset monetization and acquisition process. The implementation gets further complicated due to various approval processes, inadequate availability of transaction-related paperwork, etc.
Having worked across 24 states and various central government organizations, CBRE Government Practice has successfully executed projects related to the modernization and re-development of railway stations, tourism zones, investment promotion activities, smart cities, etc. As part of its service delivery, CBRE has been increasingly leveraging technology to offer customized and digitally enhanced solutions to all its clients.