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Apr 10, 2006, 07.07 PM IST
Sunit Sachar, Vice-President, Marketing, Parsvnath Developers Limited, discusses the changing attitudes of property developers in India.
Gone are the days when real estate market was characterized as an infant, unorganized and dominated by a large number of small players with few corporations having national presence. Today several companies have emerged as big all-India entities, which have brought professionalism and consistency in realty paradigm and are helping this segment to grow by providing world-class infrastructure. It is obvious that industry bodies such as CREDAI and NAREDCO, along with the banks, are boosting this on-going boom. Credit also goes to the international consulting firms which give value-added services to the investors.
As of now, a perceptible change in the mentality and outlook of the Indian developers has become noticeable. They have realized the importance of providing facilities of international standard and the use of the best technology. Even two years ago, only high income people could think of owning homes with fully air-conditioned spaces equipped with jacuzzi, swimming pool, 100% power back-up, top-level security and club facilities managed by professional agencies. Now these comforts are within the reach of a middle class man. Developers have studied the dynamic consumer behavior of the educated and intelligent buyers who just don’t want walls and furnishings but want their homes to reflect their personality, aspirations and style.
Being highly consumer-driven, the builders are going in for ISO 9001:2000 certifications for exceptional quality standards applied while developing townships and constructing institutional and entertainment complexes, hospitals, shopping malls and residential towers. They also assure the customers of timely completion of projects. Other innovations include the concept of sample flats, theme malls and escalation-free pricing. Focus is also on environmental protection. Rainwater harvesting is being provided to maintain ecological balance, there is control over noise-water-air pollution during the construction process and waste management techniques are being utilized. The real estate companies are actually fulfilling their corporate social responsibility in this way.
It is the dawn of GenNext real estate. And today, the builders are building bands, rather than just structures. They have roped in PR and advertising agencies to manage their media relations. Another practice is to hire foreign consultants and architects for planning the buildings and implementing 5S techniques for proper space utilization. Adherence to Vaastu Shastra and Feng Shui principles in order to ensure better fortunes is yet another feature of an improved realty world.
Meanwhile, the builders are offering several options to the property buyers in terms of size specifications and payment structures, all of which have made the life of the buyer much simpler. New revolutionary ideas like customized home designing, rating of builders and their projects, and warranties have started taking roots.
Another recent trend is the rise of suburbs. There is substantial infusion of capital in the suburbs of metro cities to upgrade infrastructure. These suburbs are becoming attractive as areas of good living because of better road connectivity, wider network of public transport and dedicated business promotion zones. Suburbs of Delhi like Gurgaon, Noida, Greater Noida and Ghaziabad have witnessed unprecedented growth. This has led to overall improvement in construction quality and infrastructure.
Large developers are now aggressively giving shape to integrated townships with in-house recreation facilities in and around the city. Residential and commercial property market is on an upswing, driven as it is by low interest rates and a general boom in the economy. Most of the growth in these areas is governed by end-user demand, primarily generated by the salaried class keen on owning houses and upgrading their living standards. With the passage of time, these cities will be emerging as hubs for future growth.
With India emerging as great outsourcing hub, the builders today are helping MNCs looking for spaces by developing business centres which are the dedicated commercial contemporary B-centres providing fully furnished high quality accommodation along with a professional support team to handle the clients’ administrative and secretarial requirements. This is still a new concept but has proved to be highly useful for firms that want to acquire new workplaces at low costs.
The globalization of Indian realty is a highly positive development. Now that the government has opened the gates to NRIs, PIOs and people with dual citizenship for investment in the country, there are opportunities galore for the realty personnel to prosper. The Centre has also approved 22 NRI townships in different parts of India with 122 more in the pipeline.
Real estate in India is today hot property for investment.and hence much positive sentiment is flowing into this sector. Many foreign firms, following the favourable FDI policy enunciated in the last Budget, are planning to enter the Indian realty market preferably through the joint venture route. Now this segment of activity is expecting more transparency in property transactions, structuring of the existing speculative market, new concepts of management and financing that will bring enhanced liquidity, greater accountability and more social responsibility to real estate process.
And all this will pave the way for the much awaited REMF (Real Estate Mutual Fund) and REIT (Real Estate Investment Trust), which have proved to be a huge success in the UK and the USA. Introduction of REMF and REIT, apart from injecting professionalism and transparency, will enable the common man or the small investor to put in money in the so-called big budgeted risky real estate. Financial institutions like HDFC and IDFC have already begun operations in this regard and promised to bring funds worth Rs. 2500 crores for this purpose. There is now need for educated professionals in this sphere, just as asset and portfolio managers work in the finance sector of the capital market.
Foreign direct investment will ensure a bonanza for both residential and commercial sectors, giving a new thrust to the retail segment. As the major retail giants arrive, the level of infrastructure and the standard of living will go up with the development of international class townships, thanks to JVs with overseas realty firms. The Indian government recently approved a few joint ventures with international real-estate companies for town ship development. Also there is the buzz over Wal-Mart, the world’s largest retailer, preparing to enter the Indian market. This trend towards organized retailing and setting up of large outlets is expected to gain momentum in the near future.
The whole thing calls for all the real estate development organizations, consultants, banks, brokers and builders to join hands to make most of the new opportunities to put GenNext real estate on a fast track.
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