The Indian real estate sector is going through a transition; in the way it conducts business as well as the way it is responding to customer preferences. From technology & transparency to product design & construction, the changes in the realty sector are evident as Sapna Srivastava spoke to various developers and industry professionals.
Real estate, till few years back was driven by family businesses, beset with stereotype designs and conventional construction techniques. Today, the professionally managed realty companies are more responsive to buyers needs and are capitalizing on technology.
As the Indian realty market is maturing, the smaller unorganized players are either getting sidelined, eliminated or are corporatizing their business to survive in the increasingly competitive environment. One of the reasons for this transformation is the changing profile of the property buyers. According to various industry reports, 80% of customers in cities like Mumbai, Delhi, Bangalore, Chennai, Pune, Hyderabad and Kolkata are salaried employees who depend on bank loans for property purchase. This has resulted in property transactions increasingly becoming legitimate.
Keeping in mind the techsavy customers, the developers are increasingly using online platform with regular updates about the project, information about various approvals and sanctions, uploaded on the website. The customer through his own log-in account can see the financial transactions/payments till date, the pictures of the construction site and progress appraisals etc. This has brought an unprecedented level of transparency in the project delivery.
Venu Vinod, Managing Director, Cybercity Builders & Developers Pvt Ltd. concurs, “As much as 80% of the buyers in cities such as Hyderabad, Bengaluru etc. are salaried, who purchase on loan. With the increase of salaried employees, the industry has increased transparency, clear land titles, proper scheduling and improved delivery and project execution. Builders also share the details and actual site pictures of the progress of the project on social media and various other platforms to assure existing customers and acquire new ones. The builders who have the reputation and the track record are preferred by the buyers and are able to command a premium of 5-10% on the prevailing market rates because of their equity and trust built over a period of time.”
The demand for small-sized apartments across India is rising significantly. In India, home buying still remains a sentimental decision rather than a financial one. So, middle income group prefers buying an apartment that can fit in the budget than renting – and the developers are paying conscious attention to consumers’ requirements. The fall in average apartment sizes across all top seven cities is a clear indication that developers intend to make houses affordable for buyers by reducing average apartment size instead of reducing the capital values, says the latest report by JLL.
Dhaval Ajmera, Director of Ajmera Group elaborates, “The demand for one bedroom apartments & studio apartments is definitely increasing. In today’s times, any salaried class or individual who has just started earning would like to have his own apartment as a security factor and as an asset for themselves. The most viable option for them is a 1-bhk or studio apartment as their investment option. The demand for 1BHK is eternal, they will remain in demand, not now but forever.”
The large format apartments are still in demand with luxury apartments and villas popular among NRI investors. Indians prefer buying property with long term view and therefore bigger apartments are preferable. For NRIs, the emotional connection with the home country and lucrative property prices as compared to other global markets are the factors for investing in Indian real estate. In terms of design, also trending are small format open layout apartments, popular mostly among young couples and nuclear families. While, more number of developers are entering affordable housing segment to counter sluggish market there is a growing niche market of studio apartments in metro cities targeting the young and upwardly mobile buyers. Dharmesh Jain, Chairman & Managing Director, Nirmal Lifestyle explained, “Rise of single working professionals and DINKS (doubleincome-no-kids) has observed a spurt in demand of studio apartments. These apartments are generally a hit amongst the IT professionals and people working in the manufacturing sector. This particular segment of buyers is ready to invest big money, as they are looking for a hasslefree lifestyle with plenty of luxury amenities. These are invariably highend buyers who like to make `lifestyle’ as their key requirement. In India such apartments are spacious enough for singles and sometimes larger for the couple.”
Ready-to-move in projects are gaining traction with maximum waiting period of one year among prospective buyers that are end users, even if it means paying a premium.
Design & Construction
As property investors and endusers are now much more aware of global trends and design & construction standards, they expect the similar criteria and developers are obliging. The developers are seeking out international architects and designers for their projects as they are perceived to bring newer ideas and a premier approach to design and planning.
With an eye on attracting first-class buyers, the construction quality and techniques too have evolved with engaging of project management companies to implement advanced construction practices and manage the project ensuring a timely delivery. As Kedar Joshi, CMO, Ahuja Constructions puts it, “Indian developers are seeking out international architects and designers for their newer ideas and premier approach to design and planning. For instance, we, are working with Palmer and Turner Architects, Singapore along with Wilson Associates, New York, for architect and interior designing respectively. Wilson Associates are experienced in creating residential projects in Singapore & New York and have made east meets west right here in Mumbai. Likewise, exterior aesthetics and professional diligence from P & T at Ahuja Towers, Worli, has given the building façade a character of its own which involved reading the design inside–out.”
Differentiating between the commercial and residential property development, Rajesh Kulkarni’s – Group Head – Architecture and Projects delivery at Phoenix Mills added, “In commercial properties, it is mostly the investors who put money and so the international firms that bring global experience and design value to the project help attract the investors. If the architecture is right, it helps the project holistically. For residential projects, developer offers the direction and international architects own experience of working on similar projects brings the right mix of design & functionality to the project, marketing is the byproduct. For instance, our luxury residential project Fountainhead in Pune is part of the commercial mall development but the concept clarity and detailed development of the concept by international architects enhanced the residential tower design and though part of the larger development offered an independent access and placement functionally. This was possible with the close coordination between the developer, international design firm and local architects.”