No Refinancing Available For Developers, Says JLL’s Ramesh Nair

Lending by non-banking financial companies to developers is estimated to fall by about 70 percent this fiscal as credit dried up after the IL&FS crisis, according to property consultant JLL India.

Developers are estimated to raise about $1.5 billion from non-bank lenders in the ongoing financial year 2019-20, Ramesh Nair, chief executive officer and country head at JLL India, told BloombergQuint on the sidelines of CII Realty & Infrastructure National Conclave 2019. That compares with $5 billion in FY19 and $8 billion in FY18.

Non-bank lenders have sanctioned fewer loans to real estate companies, according to Nair. The number of new loans to developers in the first half stood at 250, he said, adding that compares with 1,000 in entire 2018.

“There is no improvement in the real estate sector post IL&FS crisis last year and this led to the drop in NBFC lending to the real estate sector,” Nair said.

Absolutely no refinancing is available today and lenders have become very selective, Nair said. That’s why many developers are going through massive challenges in terms of liquidity to complete their projects, he said.

“The government has realised that real estate, auto and NBFCs are the most impacted sectors and it need support,” Nair said. “It should get liquidity into the market.”

Watch the full interaction here: