Construction Industry can Help India Sail Through Any Global Crisis: ASSOCHAM

In the midst of doom and gloom in the global economy with consequential impact on India, highly job-oriented construction industry can give quite positive results in terms of stepping up economic growth, more employment and raising  tax revenue for the government, if the stress-ridden sector is provided immediate succour,  an ASSOCHAM-TARI study pointed out.

“Construction sector, which is the second largest employment generator after agriculture, comprising roads, ports, airports, bridges and real estate, has the multiplier potential to create benefits at least double the size of direct inputs,” highlighted the study titled ‘Construction industry: Contributing to Make in India,’ conducted by The Associated Chambers of Commerce and Industry of India (ASSOCHAM) jointly with Thought Arbitrage Research Institute (TARI).

“The output multiplier demonstrates how an increase in demand of Indian construction sector can lead to an increase in overall output of the economy by 2.4 times thereby showcasing strong backward linkages of the sector with ancillary and complementary industries such as cement, steel, iron, bricks, sand, chemicals, heavy machines and equipment, sanitary ware, wood, electrical and other fixtures, paints and others,” noted the study.

“Over 75 percent of real estate projects of the total investments worth over Rs 14 lakh crore remained non starter (under implementation) as of FY15 owing to plethora of issues like delays in environmental clearances, project approvals, acquisition, lack of finance and carrying the baggage of badly executed public-private-partnership (PPP) models that are crippling growth of construction in India,” said ASSOCHAM Secretary General, D S Rawat. Others who spoke at the event included: Kshama V Kaushik, director, TARI and Babulal Jain, senior member, ASSOCHAM Managing Committee in Noida.

“One of the major problems facing the industry is a high level of debt on their balance sheets, resulting from project delays which, in turn, were caused by things like environmental issues both at the state and Central levels,” said Rawat.

“With the union government liberalising Foreign Direct Investment (FDI) rules in realty and construction sectors, we are hopeful that it will lift the affordable housing space, revive steel, cement and other related sectors, rev up employment scenario and boost the GDP (gross domestic product) growth,” he added.

The kinds of benefits which can accrue to the economy are worth pursuing rigorously, at this point of time when Indian economy is no more insulated from major problems facing the world.

 “Look at the way, the market has melted with Sensex nose-diving , further curtailing the ability of the companies in the construction to tap the market and reduce their debt burden while fresh projects are difficult to launch in the wake of huge funds locked in delayed projects,” said Rawat.

He added that financial results of most of the listed firms in the construction sector for the third quarter are going to disappoint investors.  

Production process is closely associated with employment, value addition and taxes.  In the long run, the future looks promising.

Rise in employment across the economy because of a rise of ` 1 of demand is roughly 3 times the rise in employment within the sector. Similarly, rising demand can lead to: increase in value addition of the economy by roughly three times the value addition within the sector; and increase in indirect tax collections in the economy by approximately two times that of the tax collections from the sector.

It is an acknowledged fact that construction has the potential to drive and revive manufacturing in any economy. The construction sector’s contribution to GDP in India has stayed fairly constant at around 7-8% for the last five years.

These factors along with strong backward and forward linkages of the sector with other manufacturing industries, make this sector a natural priority sector for the government and the focus of this report.

Besides, construction industry also has strong linkages with other manufacturing industries – it absorbs 40-45% of the steel industry’s output, 85% of the paint industry, 65-70% of the glass industry and a significant share of the automotive, mining and excavation equipment industries.

The ASSOCHAM-TARI study has estimated the output multiplier of the construction sector to be 2.384, this means, an increase of ` 1 in final demand in the construction sector will lead to an increase of the overall output of the economy by two times

It has estimated the employment multiplier of the construction sector to be 2.88, which is means, employment generated in the economy because of rise in demand of the construction sector is 2.88 times of the employment created in the sector itself

The study has estimated the tax multiplier of the construction sector to be 1.962.This means that rise in indirect tax collections generated in the economy because of rise in demand of the construction sector is approximately double the rise in indirect tax collection from the sector itself.

Real estate investment scenario in UP as of FY15:

UP has attracted about 16 per cent of the total investments worth over Rs 12 lakh crore attracted by real estate sector from private investors (including both domestic and foreign) as of FY 2014-15 in India and has managed to increase its share from just 0.1 per cent to 16 per cent during the last decade in this regard.

Within UP, private players accounted for over 98 per cent share in total investments attracted by real estate sector.

Real estate investments in UP have grown at a compounded annual growth rate (CAGR) of about 32 per cent during almost a decade (b/w 2005-06 and 2014-15).

Over 86 per cent of real estate projects in UP remained stuck and are facing a delay of about 35 months on an average.

Construction industry should be regularised to check pollution: ASSOCHAM

With fast deteriorating air quality in big cities like Delhi-NCR leading to tougher regulatory norms such as the odd-even policy for private cars, the high stake construction industry should be prepared to deal with possible public outrage and must devise ways for meeting such challenges, an ASSOCHAM Paper noted. 

"There are a number of environmental concerns that impact the Indian construction industry. These include erosion, contaminated soil, lead paint removal, air contamination by asbestos particles, disposal of hazardous material, dust control and noise level," it said. 

Mapping various policy and regulatory risks which have increased with rising environmental concerns, the paper stated these issues were also flagged by a working sub-group of the erstwhile Planning Commission. 

"We have begun this exercise of sensitising various stakeholders in the construction industry since a perception is gaining ground as if unplanned construction, done in a crude and unscientific ways is among the main culprits of pollution in big cities," ASSOCHAM Secretary General D S Rawat said. 

The paper highlighted the fact India is urbanised only the extent of 31 per cent but urbanisation at a faster pace is imperative for a sustainable economic growth. The construction industry has a major role in stepping up the urban development. 

  

"After an aborted attempt to smoothen land acquisition, any controversy on environment pollution is the last thing that the industry wants," the ASSOCHAM said. 

  

In the absence of planned and organised urban development, cities have witnessed mushrooming of slums which now account for a quarter of all urban housing. Mushrooming growth of slums with lack of sanitation and absence of waste disposal add to the city pollution.

“Pollution in some of the big cities is becoming unbearable and as happened in the past, the court intervention, accompanied by pressures from civil society, health activists and environmentalists would bring in tougher regulatory norms for a host of industries which should be living up to these challenges by technology innovation and going green in their approach,” the chamber said.  

  

Except for the top 20 players, the Indian construction industry is highly fragmented, family owned, or based on individual ownership. "The process of evolving has been painfully slow and unplanned. Even a lot of construction happens in the primitive way with concrete and bricks being moved by head load. Mechanisation has crept in as projects have become large but these are only a small fraction of the construction market, ASSOCHAM noted.

India fully opens FDI gate to Construction sector

In a major development which would infuse the much-needed fund into the sagging construction sector, Indian government has allowed 100 per cent Foreign Direct Investment in construction of projects, which includes commercial, residential, infrastructural and mixed-use developments.

FDI will be allowed for developing townships, construction of roads or bridges, residential  / commercial premises, hotels, hospitals,  educational institutions, resorts, city and regional level infrastructure and recreational facilities, according to a statement issued by the ministry of Commerce and Industry.

The government has promised to provide all necessary approvals through automatic approval system for such projects, the release said.

However, the government has put some restrictions on projects to get eligible for FDI funding. It has fixed the minimum land area for development of serviced housing plots at 10 hectares while for construction of development projects, the minimum built-up area should be 20,000 sq metres.  In case of a combination project, the release said, any one of the two conditions should be met.

On minimum capital investment, it has been fixed at $10 million for wholly-owned subsidiaries while for joint ventures with Indian partners it should be $5 million.

Easing the lock-in period norms, the government said that the lock-in period of three years would be applied from the date of receipt of each installment of FDI or from the date of completion of minimum capitalisation, whichever is later. However, the investor would be permitted to exit earlier with prior approval of the government.

The investor will be permitted to exit on completion of the project or after development of trunk, infrastructure including roads, street lights, drainage, water supply and sewerage.

The rules also made it mandatory for developers to complete 50 per cent of project within a period of five years from the date of obtaining statutory clearances.

The investor / investee company would not be permitted to sell undeveloped plots - undeveloped plots are those where roads, water supply, street lighting, drainage, sewerage, and other conveniences, as applicable under prescribed regulations, have not been made available.

The investor should provide the infrastructure and obtain the completion certificate from the concerned local body before being allowed to dispose of serviced housing plots.

The project should conform to the norms and standards, including land use requirements and provision of community amenities and common facilities, as laid down in the applicable building control regulations, bye-laws, rules, and other regulations of the state governments and local authorities concerned.

Between 2000 and 2013, India's $126 billion construction industry has attracted 11 per cent of foreign investment into the country, which makes it the second highest of any sector. In the last financial year, the sector has attracted $1.2 billion of FDI till March 31 compared to $1.3 billion the previous year. Between April and August this year, construction sector has got $446 million worth FDI.

Indian construction industry looks for $1.0 trillion funding for growth

The Indian construction industry registered a compound annual growth rate (CAGR) of 13.52% in nominal terms during the review period (2009–2013), driven by private and public investments in infrastructure, as well as institutional and commercial construction projects.

Industry growth is expected to remain strong over the forecast period (2014–2018), as a result of the government’s commitment to making infrastructural improvements and the implementation of the 12th Five-Year Plan (2012–2017), under which the government expressed plans to invest INR56.3 trillion (US$ one trillion) in various long-term development plans. Consequently, industry output is expected to record a forecast-period nominal CAGR of 10.09%.

According to the Ministry of Statistics and Programme Implementation, the construction industry’s value add at constant prices rose by 3 % in 2013 – up from 1.8% in 2012. The annual pace of growth has slowed, however, from an average of 8.5% in 2010-2011. The outlook for growth is positive, having been supported by government investment to improve the country’s infrastructure, education and healthcare, as well as spending on affordable homes to meet the country’s rising demand for housing. Large-scale investments in infrastructure development under the 12th Five-Year Plan will be an important driver of growth.

Infrastructure investment remains a key strategy for supporting economic growth. In its 2014–2015 budget, the Indian government increased its expenditure on the infrastructure sector and allocated INR1.8 trillion (US$27.3 billion); an increase of 8.6% over the 2013–2014 budget expenditure. This will contribute to the continued expansion of infrastructure construction over the forecast period.

With an aim to increase foreign exchange earnings from the tourism industry to INR1.5 trillion (US$26.0 billion) and attract eight million tourists by 2015, the government is focusing on the construction of new tourist destinations such as Tannirbhavi aquamarine park, the Bhaleydunga Skywalk in Gangtok and the construction of a film city at Hesaraghatta in Bangalore. This will help to support growth in the leisure and hospitality buildings category over the forecast period.

As a robust and modern transportation infrastructure is vital for the growth and competitiveness of the economy, the government is focusing more on infrastructure development. Accordingly, a total of INR56.3 trillion (US$1.0 trillion) is planned to be spent in the next planning period of 2012–2017; an increase in investment of 136.0% from the 11th Five-Year Plan. From this proposed investment, INR15.0 trillion (US$279.4 billion) will be spent on electricity, INR9.7 trillion (US$180.4 billion) on roads and bridges, and INR5.2 trillion (US$97.1 billion) on railways. The government plans to achieve these objectives through the PPP model, and attract half of the funding amount from the private sector.

The country’s rising population and urbanization trends will continue to provide some support for residential construction. According to the World Population Statistics, the country’s population grew by 17.7% from 2000 to 2011 – from 1.1 billion to 1.2 billion – and is expected to reach 1.4 billion and 1.6 billion by 2020 and 2040 respectively. As a proportion of the total, the country’s urban population increased from 27.8% in 2001 to 31.2% in 2011, and is expected to reach 33.0% by 2026. The country’s growing population and rapid urban development will create fresh demand for residential construction market over the forecast period.

Investmnet in construction sector may improve post polls

Mumbai: A stable government at the Centre after the general elections would improve the investment in the construction sector in the third quarter of the current fiscal, according to a report.

The report by credit rating agency ICRA said that inordinate delays in environmental clearances, high land acquisition cost, fuel supply shortages, precarious financial health of distribution utilities, tariff-related impediments for port sector and dwindling interest from private players have put the construction sector in a tight spot, 

However, until September 2014, execution challenges will persist and the revenue growth of construction firms will continue to remain muted on the back of poor performance of companies in the infrastructure sector,  it said.

"We expect revenue pressure to continue till the first half of the fiscal after which improvement in the investment cycle could be closely linked to the election outcome and perceived stability of a new government,"  said.

Companies engaged in sectors like roads, airports and power have not been able to achieve their set business targets, a PTI report quoting the rating agency’s observation, said.

"In fact, companies in the construction and infrastructure sectors form the highest proportion of CDR cases approved in FY13 and first half of FY14," the report said.

According to ICRA, NHAI was able to award just 15 per cent of its targeted 7,500 km amid dwindling interest from private players coupled with increasing difficulties in achieving financial closure; relatively less remunerative stretches in the offering and delays  in environmental clearances and land acquisition.

The power sector continues to face multiple concerns relating to mine development permissions, fuel supply shortages, financial health of distribution utilities, delays in finalisation of standard bidding documents for power procurement and lack of fresh power purchase bids by state discoms, it said.

In the ports sector, a total of 32 projects aggregating Rs 6,760 crore were awarded in FY13, a healthy growth over the three projects awarded in FY12, though this fell short of the planned target of 42 project awards for 2012-13.

Due to the declining trend in private participation, new project announcements during April-December 2013 have de-grown by 12 per cent on y-o-y basis after a massive 50 per cent y-o-y de-growth to Rs 4.7 trillion in FY'13.

"However, there is a silver lining in construction companies witnessing business opportunities in the railways, ports, urban infrastructure and airports sectors. Given the importance of the projects and stated focus on implementation, the dedicated freight corridor is expected to provide significant opportunities to construction companies," the report said.

Around 76 per cent of land for the Eastern DFC and 86 per cent for the Western DFC were acquired as of June 2013 translating into overall land acquisition progress of 82 per cent for the project, the report said.

As per the FY'14 targets, the government expects to undertake construction of around 51 low-cost airports in Tier 2 and 3 cities on cash contract basis in addition to eight on PPP basis.

"However, the dismal state of road project awards in FY'13 continued well into FY'14 especially in case of BOT projects.

 

NHAI expects to catalyse private sector interest in the sector by awarding projects on EPC basis wherein construction is funded by NHAI but undertaken by the private sector without assuming traffic risks," it said.

Indian construction Industry: Challenges ahead

In India, construction is the second largest economic activity after agriculture. Construction accounts for nearly 65 per cent of the total investment in infrastructure and is expected to be the biggest beneficiary of the surge in infrastructure investment over the next five years. Investment in construction accounts for nearly 11 per cent of India's Gross Domestic Product (GDP).

The construction industry has been witness to a strong growth wave powered by large spends on housing, road, ports, water supply, and rail transport and airport development.

India, as the world's seventh largest country by area and second biggest by population, is one of the most dynamically growing, but largely untapped construction equipment markets. From 2014 to 2020, it is estimated to grow six times to a size of about USD25 billion, says Japnit Singh, Senior Director, Singapore and India of Spire Research and Consulting.

The Planning Commission jointly with the Indian construction industry has set up Construction Industry Development Council (CIDC) to take up activities for the development of the Indian construction industry. The Council provides the impetus and organizational infrastructure to raise quality levels across the industry.

This helps to secure wider appreciation of the interests of construction business by the government, industry and peer groups in society. CIDC is a change agent to accelerate a process of self-reform that should enable the industry to answer the challenges of the future.

While the construction sector's growth has fallen as compared to the pre-2008 period, it has picked up in the recent past. Its share as a percentage of GDP has increased considerably as compared to the last decade. To put things in perspective, the total investment in infrastructure - which in this case includes roads, railways, ports, airports, electricity, telecommunications, oil gas pipelines and irrigation - is estimated to have increased from 5.7% of GDP in 2007 to around 8 % by 2012, says Spire Research and Consulting.

Boom in construction equipment

The construction equipment sector in India has been growing at a scorching pace of 30% annually, mainly driven by the huge investments being made by the government and the private sector in infrastructure development. The growth of this sector is directly interlinked with the growth of the Indian economy and indirectly with the growth of infrastructure. 

The last few years is a phase of restructuring in the industry through acquisitions and joint ventures. This also reflects the active interest of international majors in the domestic market. Many international players have been looking for importing and selling complete equipment in India. Some international companies are looking at the prospects of enhancing their market presence based on higher investment in mining and infrastructure and also using their Indian operations to meet demand in India. 

The construction equipment-rental business in India, which currently accounts for only around 7 to 8 per cent of the size of the global industry, is another growth driver.

FDI norms to be eased

A draft note to be submitted to the Cabinet once it is finalized, is proposing to ease conditions under entry guidelines, minimum area requirement and minimum lock-in period for investments. Current FDI policy permits 100% foreign investment, including in housing, townships and construction infrastructure with several restrictions. These include a three-year lock-in period for investments in housing and townships, a minimum built-up area of 50,000 square meters and minimum capitalisation of $10 million for wholly-owned subsidiaries.

To make the sector more attractive, the Housing Ministry has proposed that the minimum lock-in period be reduced, the built-up area required be brought down to 20,000 sq. m and minimum capitalization reduced to $5 million.

Procuring capital from foreign investors for projects in India

As opportunities in the sector continue to come to the fore, foreign direct investment has been moving upwards. The real estate and construction sectors received FDI of €216.53 million in the first half of the current fiscal year.

To maintain consistent growth, foreign investment is crucial for India. The Indian Government has indicated its intention to create an environment, friendly to foreign investors by allowing foreign direct investment (FDI) up to 100 per cent in 2005 in townships, built-up housing and construction development projects with the liberalization of FDI regulations. Also, the recent decision of Indian Government of opening up retail in multi brand will not just benefit the retail industry but will also push up the demand for commercial real estate throughout the country.

According to statistics available with Department of Industrial Policy and Promotion, Construction development (including townships, housing, built-up infrastructure & construction-development projects) sector has attracted a cumulative foreign direct investment worth USD 22,007.67 million from April 2000 to February 2013. FDI flows into the construction sector for the period April 12 - February 13 stood at USD 1,260 million. The Indian Construction Industry is an integral part of the economy.

Liberalization of policies and a deliberate attempt made by the Indian Government can open several doors to the construction companies. Opening up of FDI in relation to township, housing, built-up infrastructure and construction of development projects by allowing FDI upto 100% under automatic route was the first step towards promoting the participation of the foreign investors in construction industry.

Challenges ahead:

• Poor penetration of construction equipment and a large dependence on skilled labour
• Current economic situation may have an adverse impact on construction industry
• High cost of capital coupled with a lack of options for rental equipment
• Poor transportation infrastructure to move equipment and material opportunities
• Continuous private sector housing boom will create more construction opportunities
• A hunger for technology amongst investors who are frustrated about long turnover time and project delays
• A growing demand for prefabricated construction
• Public sector projects through Public Private Partnerships will bring further opportunities
• Developing supply chain through involvement in large projects is likely to enhance the chance in construction.
• Renewable energy projects will offer opportunities to develop skills and capacity in new markets
• More flexible training delivery techniques are now available

Spire Research and Consulting is a leading strategic market research consultancy specialising in global emerging markets - the Asia-Pacific, Latin America, Middle East, Africa and Russia/CIS. Spire focuses on holistic research projects, which integrate traditional customer research with knowledge of the broader business eco-system. 

Through its growth-focused solution portfolio, Spire Research and Consulting helps its clients with strategic decision-making for market growth and entry. Spire's management team works through its eight country offices, international advisors and local associates in over 30 countries to bring to each project the highest standards of research conceptualization, execution and delivery. 

The Spire Group has delivered over 1,000 market research and consulting projects for over 50 Global Fortune 1000 firms.

Mumbai to host Big 5 Construct India 2013

Indian construction industry is a major contributor to the country's GDP (8% in FY12) and one of the largest employers currently employing around 33 million people. While the Indian economy grew by 5% in FY13 as compared to 6.2% in FY12, the construction industry grew by 5.9% in FY13 as against 5.6% in FY12.

"India is expected to emerge as the world’s 3rd largest construction market by 2020," according to a PwC report prepared for the organizers of The Big 5 Construct India.

In the last decade, "The country has witnessed a tremendous housing boom and over the span of five years, from 2012 to 2016, the real estate sector is expected to account for 43% of the construction spend in India.  This segment is forecast to achieve a CAGR of 13.6% during this period.  The PwC report estimates that the market for real estate construction segment in India is likely to aggregate to approximately USD 380 billion over the five year period, 2012 to 2016," stated Dushyant Singh, associate director - strategy from PwC.

Leveraging this unprecedented growth and opportunities for suppliers of construction products offered by the Indian market, Federation of Indian Chambers of Commerce and Industry (FICCI), Ministry of Urban Development, Government of India and DMG events are jointly organizing The Big 5 Construct India 2013, an international building and construction show to be held at the Bombay Exhibition Centre in Mumbai from 2nd to 4th September 2013.

Andy White, Group Event Director, dmg events said, "Thanks to the wonderful support from FICCI and the Ministry of Urban Development, Government of India, the first Big 5 Construct India show in Mumbai promises to be a huge success."

According to Srikanth Srinivasan, associate president - procurement, Puravankara Projects, "The Big 5 is a “must visit” event for any professional from the Construction industry and gives valuable insight into the new developments and trends in the Construction industry. It is also a great platform for Sellers and Buyers to meet and explore opportunities for doing Business. I have attended the Big 5 in Dubai last year and would definitely attend the Big 5 in Mumbai in September this year and would strongly recommend my colleagues and peers from the industry to do the same."

Indians need 500 mn houses in ten years: FICCI

New Delhi: As many as half a billion Indians would require new homes in the country's various cities over the next decade, a requirement equivalent to all of China, North America and Western Europe put together, according to a FICCI report.

The report 'Urban Infrastructure in India', prepared by Federation of Indian Chambers of Commerce and Industry (FICCI), said the country's population is slated to grow to 1.7 billion by 2050 and rapid urbanisation will add nearly 900 million people to Indian cities.

"City capacity will need to grow nearly 400 per cent in less than 50 years. This is the scale of urbanisation and urban infrastructure needs India has to contend with in the face of grossly inadequate urban infrastructure to meet the demands of the existing urban population," it said.

There is insurmountable pressure on civic infrastructure systems such as water supply, sewerage and drainage and solid waste management, a PTI report quoting FICCI, said.

Highlighting the deficiencies in the urban infrastructure procurement process, the report said that Urban Local Bodies (ULBs) and government procurement in relation to urban infrastructure focuses more on construction of the facility rather than on the long-term operation and maintenance of the facility.
Maintaining that Indian ULBs have a weak fiscal and financial base that hampers their ability to provide efficient services to citizens, the industry body said that, "There is no framework governing or providing for maintenance of common spaces, particularly areas such as markets, housing colonies, bridges, footpaths, street lighting, play-grounds, common green and open areas."

Urban infrastructure, more than any other sector, faces the drag of multiple authorities having jurisdiction over different aspects of the same infrastructure facility, it added. "We have to rethink the way we live or there is no tomorrow," FICCI’s Urban Development Committee Chairman, Pradeep Puri said.

It recommended that government authorities shift the focus of their contracts for new facilities from merely construction works contracts to performance-based maintenance contracts under which the scope and obligations of the contractor would be mentioned.

"Undertake maintenance of the facility for a minimum number of years; and link disbursement of money evenly over the period of construction/maintenance," it added.

Indian planning norms have been borrowed mainly from the West and need important modifications, it said, adding there should be a 'Mission on Urban Planning'.

Fitch predicts negative growth for Indian realty market in 2012

NEW DELHI: More negative news for the Indian realty market which is already affected by several macro-economic factors. Fitch, an international rating agency, has projected a ‘negative outlook’ for the Indian real estate sector in 2012 due to weak overall demand and higher construction costs, which are likely to continue to squeeze margins in 2012.

The ratings firm has pointed out that high interest rates as well as high home prices have reduced the affordability for home buyers.

For real estate companies, both material and labour costs have increased in 2011 and home sales, which had improved in the first quarter of 2011, have moderated significantly since and are likely to continue at lower levels in the first quarter of 2012 as well, reports Economic Times quoting Fitch report.

In the commercial office segment, oversupply of space continues in some markets. "However, the demand for office space is likely to be maintained at 2011 levels as the hiring momentum of the IT/ITeS sector, the major driver of office space in India, continues in 2012," says Fitch. The demand for retail commercial space, however, is expected to be low in 2012.

Declining profits for real estate companies has resulted in high debt levels for companies, and this is expected to continue in 2012, negatively impacting the creditworthiness of real estate companies. Going forward, the dependence on operational cash flows to fund growth and service debt is likely to increase. Fund raising options for real estate companies are limited due to the cautious approach of banks, weak equity markets and dwindling investment by private equity funds.

Improved macro-economic conditions leading to improved demand would have the potential to improve cash flows to real estate companies and see the outlook revised to stable. Also, the ability to judiciously use cash from liquidating existing inventories, which would improve capital structures, may result in the selective upgrades of companies in the real estate sector, even while the overall outlook is negative.