All leading real estate developers will eventually become national players and compete with each other across the country, Godrej Properties Executive Chairman Pirojsha Godrej said, signalling maturity in India's property market.
Pirojsha said the company is in a good position to take up the challenge because of the Godrej brand and its understanding of the property market.
"I think our view is, we have been saying for a while, all the leading developers will end up being national developers. So I think these top four five developers will be competing with each other across the country," Pirojsha Godrej said in an interview to PTI. He was replying to a query on business expansion by big listed players from their core cities to new markets.
Pirojsha strongly believes that all big developers will have presence in top 7-8 cities in the first stage. On the competition, Pirojsha said: "We feel we are in a good position, given the Godrej brand, given our understanding and the teams we have."
Godrej Properties, which is the real estate arm of business conglomerate Godrej Group, is one of the leading developers in the country. The company is currently focusing on four big markets -- Delhi-NCR, Mumbai Metropolitan Region (MMR), Pune and Bengaluru. It is exploring to enter Hyderabad.
In the Delhi-NCR market, which contributed 40 per cent to its total sales bookings of nearly Rs 8,000 crore last fiscal, the company first established strong presence in Gurugram, Delhi and Noida-Greater Noida, before expanding to Faridabad and Sonipat.
When contacted, property consultant Anarock Chairman Anuj Puri said: "Leading developers will become national players but the process will be gradual. It will not be in one go. It will be one city at a time.' Describing real estate as a "difficult business", he said the leading developers would try hard to excel in one city and establish a strong foothold before entering into another.
Globally also, Puri said the real estate developers have remained confined to focused territory. India's real estate market is by and large fragmented and unorganised with a decent presence of numerous local players in every major tier I and II cities.
However, the industry is getting organised lately thanks to regulatory law RERA and other reforms. Default in deliveries by many builders -- some big and many fly-by-night operators have also resulted in demand gravitating towards large credible developers with good track record of executing projects.
To encash this opportunity, Mumbai-based Macrotech Developers, which has a strong presence in MMR and Pune, has recently entered the Bengaluru market with a housing project. Bengaluru-based Prestige Group has entered Mumbai and Delhi-NCR markets.
Realty major DLF, which is being credited for the development of IT city Gurugram, has established a big presence in Chennai's office market. It has now come up with housing projects as well. Other major developers including Tata Housing, Sobha, Brigade Group, Hiranandani group, Mahindra Lifespace, Shapoorji Pallonji Real Estate, Puravankara, Shriram Properties and Birla Estate have presence in multiple cities.
Bengaluru-based Embassy Group is merging its various assets with Indiabulls Real Estate, which will help the company in having presence in MMR and Delhi-NCR. Real estate market, especially housing segment, is witnessing a major demand-supply consolidation, driven by four major disruptions -- demonetisation, RERA, GST and COVID-19 -- in the last six years.
The credible players -- listed and unlisted -- have clocked record sales bookings in the last few years, encouraging them to expand their business.
As leading developers look for opportunities in their focus market and also newer ones, the competition for buying land or having partnerships with land owners has intensified.
They need to create land banks for future developments to sustain their business growth. As a result, the market is witnessing a lot of Joint Development Agreements (JDAs) between big-branded developers and landowners.
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