The Battle Royale in Mumbai real estate: Oberoi Realty vs Hiranandani Group
With the availability of large land parcels, every major builder of Mumbai has placed bold bets in the Thane market
December 02, 2021 / 16:13 IST
In Thane, the biggest edge for Hiranandani is its long-standing association with the local market. (Image: Hiranandani)
In the next few weeks, the Mumbai real estate market will witness a contest between the top two builders of the city. The title holder: Hiranandani Group. The new contender: Oberoi Realty. Location: Thane. For people unfamiliar with Thane, if Mumbai is Delhi, then Thane is Gurgaon. Where Mumbai ends, Thane starts.The growth of Thane as a location and a real-estate market over the last two decades has been stunning. With the availability of large land parcels, every major builder of Mumbai has placed bold bets in that market. There is Kalpataru, Lodha, Rustomjee, Tata, Shapoorji, Hiranandani and so on. Oberoi Realty was late to the party, when it acquired its land parcel in 2019. Now, after much delay, it’s finally here. Its track record however is outstanding. With the exception of one project, Oberoi Realty has made it a habit of entering a market and then quickly becoming the undisputed champion of that market. In Thane, it will not be easy. It’s up against a heavyweight who created the template that Oberoi subsequently followed. The heavyweight is Hiranandani Group. The template is mixed-use developments that provide holistic living in quality constructions--for a steep premium over neighbouring projects’ prices. That ensures hefty profitability margins. Oberoi Realty is the most profitable listed developer in India. On the other hand, Hiranandani Group is considered to be the most profitable developer in India. In a market littered with many branded developers and large projects, Hiranandani Estate is undoubtedly a status symbol in the Thane market. While both the players will operate in different micro-markets, the sheer size of the two projects will lead to an overlap of potential customers. What each one offersGiven this exciting contest, I ran a poll on Twitter on who will win. It ended with 57% favouring Hiranandani Estate and 43% backing Oberoi Realty. I suspect this is the only competitor against whom Oberoi Realty could be considered the underdog. On one hand, the poll results should be taken with a pinch of salt since there are limited details about Oberoi Realty’s offering. It’s product, plan and pricing are yet unknown. On the other hand, the poll results are also about audience’s familiarity with Hiranandani projects, which is higher against that with the Oberoi offerings. One player does townships, while the other does gated communities. It is possible that many Mumbai residents have not even visited a single Oberoi project in their lifetime. But, it is highly unlikely that many have not explored Hiranandani township. Even in the Thane market, the difference in development potential is stark. Oberoi Realty is working with a 60-acre land parcel. Hiranandani is working with a 388-acre land parcel. That allows Hiranandani to craft a more elaborate experience.Part of the reason for that is the underlying philosophy of the two players. Oberoi is fixated with premium locations, which means higher prices for smaller chunks, while Hiranandani appears to be fixated with getting large contiguous land at low prices. That means locations that are far from being prime, but they work because the company then puts every effort into transforming these locations. In Thane, the biggest edge for Hiranandani is its long-standing association with the local market. It was one of the first movers and has cultivated its audience over the years. It has a wide bouquet of offerings that sell for below Rs 1 crore and go all the way up to Rs 10 crore. In contrast, Oberoi Realty will work with a limited range of offerings. Keeping in mind its desire for exclusivity it will have a steep entry-level price point. I suspect it will receive a strong response at launch, irrespective of the type of offering it throws up. The challenge will be to keep the sentiment upbeat after the initial euphoria has passed. The appropriate time to make an informed judgement between the two will probably be after five to seven years, when Oberoi’s project will have seen a meaningful degree of delivery in residential and non-residential execution. Eventually this contest is healthy for the market. A prospective customer will not be making choices based on the bare minimum – such as whether the project will be delivered or if it will have leakage. The decision-making will rest on more evolved factors.It took a long time but Mumbai residents will finally see a top-level contest when going to buy their apartment. May the best man win.
Vishal Bhargava is a real estate enthusiast who views and reviews new projects, when not busy with his newstoon platform Snapnews. The views are personal.
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