DE­VEL­OPER’S KEY TO SUC­CESS

At a re­cently held Realty+ Con­clave, some of the em­i­nent in­dus­try pro­fes­sion­als ex­pressed their views on the roadmap for de­vel­op­ers to go from mere sur­viv­ing to flour­ish­ing in the busi­ness of bricks and mor­tar.

Realty Plus - - Contents -

The real es­tate sec­tor has been sail­ing in tur­bu­lent wa­ters over the past few years and only a few have been able to stay afloat, while even fewer have wit­nessed suc­cess. Jayesh Kariya Part­ner – In­ter­na­tional Tax & Reg­u­la­tory, BSR & As­so­ci­ates from Mum­bai com­pared the sec­tor to a child learn­ing to walk, who keeps fall­ing then gets up again and starts walk­ing. In­deed, the real es­tate mar­ket hasn’t had it easy in re­cent years. JC Sharma, Vice-chair­man & Manag­ing Di­rec­tor - Sobha Ltd agreed that the pace at which the real es­tate sec­tor is cur­rently func­tion­ing, no de­vel­oper with con­vic­tion can say that they have got into the growth mode. “Ac­cord­ing to me the key to suc­cess are fo­cus on the prod­uct qual­ity, de­liv­ery time and main­tain­ing suf­fi­cient op­er­a­tional cash flow.”

The en­try bar­ri­ers in the real es­tate though have re­duced over time, the com­plex­i­ties in the busi­ness, op­er­a­tions and profit mar­gins have in­creased man­i­fold. Suresh Hari, Vice Pres­i­dent CREDAI Ben­galuru & CEO Vishal Builders & Pro­mot­ers em­pha­sized the need to have a ra­tio­nal ap­proach and not over-do de­vel­op­ment. “The de­vel­op­ers should be sen­si­ble on prod­uct mix and cus­tomer pro­file,’ he said. Pu­ra­vankara Lim­ited for in­stance is present in 4 states and 8 cities across In­dia and the mantra for their suc­cess is their brand con­tends Ashish Pu­ra­vankara, Pres­i­dent CREDAI Ben­galuru & MD, Pu­ra­vankara Lim­ited. “When we launched in Pune we sold al­most three quar­ters of our in­ven­tory be­cause of the brand. It is also im­por­tant to build a busi­ness model with each re­gional of­fice as its own profit cen­tre that in­cludes local peo­ple and their wisdom as they un­der­stand the re­gional sen­ti­ments, lan­guage and re­quire­ments”

Adarsh Narhari, MD & CEO - Mantri Primus Lifes­paces

con­curred that the evo­lu­tion of a brand lies in the at­ten­tion to de­tail of the prod­uct. “One must build projects with some unique sen­si­bil­ity that re­flects com­pany’s vi­sion and thus gets as­so­ci­ated with the com­pany’s name. That’s where de­vel­op­ers need to find their bal­ance.” Apart from the brand iden­tity, tech­nol­ogy has now come to play a ma­jor role in the suc­cess of a project ac­cord­ing to Di­nesh Malkani, Founder & CEO- Smarten Spa­ces. He sees this as the best time for real es­tate to adopt tech­nol­ogy. “Till 4-5 years ago the tech­nol­ogy was ex­pen­sive and the user base them­selves did not think tech­nol­ogy in real es­tate was im­por­tant. The key is to iden­tify one’s busi­ness goals and then choose the cor­rect tech­nol­ogy.”

The Way For­ward

Go­ing for­ward, an im­por­tant con­sid­er­a­tion for a de­vel­oper will be the ac­cu­rate mar­ket as­sess­ment. Samir Arora, CEO & MD Huts Global, Gen­eral Sec­re­tary, CREA (I) pre­sent­ing the mar­ket­ing an­gle said that post RERA se­ri­ous play­ers have grown and un­or­ga­nized have van­ished. “Dis­rup­tion and tech­nol­ogy are go­ing to be the norm of the day,” he stated. Hari felt that mom and pop cul­ture will co-ex­ist with large merg­ers and small play­ers will find their space in the niche mar­ket. To this ef­fect, Sharma also points out that balanc­ing the in­ven­tory of 4-5 years with the land ac­qui­si­tion is ad­van­ta­geous for a de­vel­oper. Agree­ing to Sharma’s view of dis­crep­ancy in avail­abil­ity of land across re­gions, Pu­ra­vankara em­pha­sized, “It was our brand that got us en­quiries from land own­ers and au­thor­i­ties of other cities and that’s how we got in those mar­kets.”

Given the sheer size of ur­ban pop­u­la­tion and de­mand for hous­ing, the realty sec­tor once in an or­ga­nized mode will move nowhere but up­wards. Ex­press­ing sim­i­lar sen­ti­ments, Arora said, “The cur­rent gen­er­a­tion of youth have much larger wal­lets but is wary of life­time of EMIS. They want smart and smaller homes and de­vel­op­ers will need to build as per chang­ing de­mands of the mar­ket to suc­ceed or even flour­ish.” Ac­cord­ing to Malkani, same con­cept ap­plies to com­mer­cial spa­ces, “Ten­ants in­sist on tak­ing a per­cent­age for fixed al­lo­cated seats by sign­ing a 5 year lease so that at least 15-20% of their work force can work in flex­i­ble places. If a de­vel­oper is able to pro­vide this, they have a suc­cess­ful busi­ness model.”

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