International property consultant (IPC) Sotheby’s International Realty has extended its Keystone programme in India raising hope of clearing unsold inventory for realtors grappling with liquidity issues, piling unsold inventory and rising trust deficit from homebuyers amid the grim COVID situation.
Sotheby’s International Realty's Keystone, a global programme that markets and sells new developments, has expanded its portfolio in India last quarter. After strengthening its footprint in Delhi, Mumbai, and Kolkata, it also plans to add Bengaluru to its portfolio.
In the last quarter, the Keystone programme in India added nine new developments to market under its kitty making the total inventory worth Rs 10, 000 crore.
“Pre-COVID, India Sotheby’s International Realty had just two projects and now we have increased our focus significantly on the Keystone programme by adding about 20 seasoned real estate professionals and have been approached by several developers to partner with them,” Amit Goyal, CEO, India Sotheby’s International Realty told Moneycontrol.
“We plan to have inventory worth at least Rs 20,000 crore by December 2021,” he said.
Currently, our operations are in Delhi, Mumbai and Kolkata and these remain our focus markets. Depending on the pandemic, our next target is to open an office in Bengaluru sometime next year, he said.
While the company’s focus area is to market and sell uber-luxury, standalone properties, the Keystone programme focuses on new developments.
Keystone is the brand’s flagship programme launched globally by Sotheby’s International Realty in 2018 with the objective of providing sales and marketing services to new developments. There are over 200 developments across 30 countries with an inventory value of Rs 1.5 lakh crore being marketed under the global brand.
Through this initiative, developers who enter into a tie-up with Sotheby’s International Realty, are provided online and offline marketing services that include exposure through the global luxury real estate website and through local and international sales agents.
“All these Indian projects that enter into marketing tie-ups with us are marketed locally as well as internationally. The global platform provides them with an opportunity to reach out to the NRI clientele. There are about 35 million NRIs and they do buy properties in India for their families as well as an investment,” he explains.
The company cherry-picks developers it wants to associate with. “We are extremely selective about picking projects. Our focus is on ready-to-move-in projects but we have also got on-board new launches by highly credible real estate brands having proven track record. We make zero compromises,” explains Vineet Nanda, director – New Projects, India Sotheby’s International Realty.
The company recently tied up with Krisumi Waterfall Residences, which is the first Indo-Japanese mega real estate project in India, as their strategic marketing partner. Krisumi is a collaboration (a 50:50 JV) between the world-renowned Sumitomo Corporation from Japan and the Krishna Group in India.
The IPC has also joined hands with TATA Housing to handle the marketing campaigns for the Gurugram-based developments, Tata Housing Gurgaon Gateway and La Vida.
Other tie-ups are with projects such as Paras Quartier, Gurugram, The Hibiscus and The Leaf by SS Group in Gurugram, Leela SkyVillas, New Delhi and Raheja Revanta, Gurugram and Vivara, Kolkata.
A large chunk of the inventory being marketed under the Keystone programme includes the unsold inventory lying with the developer.
“Through this programme we work with the developer to market the inventory in the most efficient manner and help them sell it. The units marketed under the global brand does not command a premium nor does it offer discounts,” clarifies Nanda.
“The company has sold over 20 homes in the first month of onboarding,” claims Nanda.
No discounts strategy
The company focuses on tie-ups with only branded developers. “There is no distress in the projects we decide to market and therefore there are no freebies. Even if we are marketing the unsold completed inventory, we make sure there is value for the buyer and prices are realistic. But there are no freebies or discounts,” says Goyal.
The marketing tie-up with the global brand such as Sotheby’s International Realty helps enhance the image of the real estate brand and “people are ready to pay a price,” says Nanda.
Also, instead of the 10:90 scheme propagated by several developers, most developments under the Keystone programme are marketed under the 20:80 scheme.
“The 10:90 payment plan is a weak marketing strategy. It does not get in the required cashflows for the developer. Only if there is a banking arrangement, does the 10:90 plan make sense,” explains Nanda.
Most of the projects marketed under the brand are by top developers. “The objective is not to push sales through freebies but marketing a product with the focus being on the right price and a healthy payment plan. We try creating a balance where the developer gets 20 percent payment at the onset. This ensures there is enough skin in the game for the buyers. This is important in a market such as India where price volatility is high unlike in western countries,” says Goyal.
So, who is buying during the pandemic?
Serious first time buyers and corporate heads wanting to shift nearer to their offices.
“Conversion rates have almost doubled from 5 per cent pre-COVID to almost 10 percent during the pandemic. The number of window shoppers has come down drastically, it’s only serious buyers who are signing on the dotted line. People who are on rent and those who want to upgrade to bigger apartments are considering buying homes in today’s market,” says Nanda.
Some of these projects in the millennium city are targeted for the first time buyer.
Take the case of Krisumi Waterfall Residences located in Sector 36A in Gurugram which is an integrated development on a 65-acre land parcel. “The project offers several conveniences to buyers as well as connectivity to all the commercial hubs in Manesar and Neemrana where there are several multinational corporations,” says Goyal.
During the pandemic, homebuyers, especially those who have a stable job and are on rent have realised the importance of owning a house. Interestingly, some corporate honchos are contemplating shifting closer to their workplace.
“Rather than commuting from Delhi and spending two hours on the road, several corporate heads are choosing to reside in complexes close to their workplace. This is a new trend. Besides, they can buy into a larger apartment or a villa at a lesser price and have all the modern amenities thrown in,” says Nanda.
India Sotheby’s International Realty is part of the of US-based Sotheby’s International Realty, which operates a global network of over 23,000 affiliates with 1000 offices across 72 countries, dealing in luxury real estate properties.
The company achieved a global sales volume of 114 billion dollars in 2019. Sotheby’s is a 275-year-old world-renowned brand that is synonymous with luxury, serving the global clientele in acquisition and disposition of art and valued assets such as jewellery, wine, cars, watches as well as high-end real estate.