Why Going National is Now Critical for Real Estate Players
With RERA and GST, it's time to spread wings nationally
Real estate in India is a subject of individual state because of the federal structure similar to that of the US, where rules related to property differ from state to state . This has, in turn, resulted in the development of prominent local brands and most developers have continued to focus on their regions. With local laws, specific consumer trends and sensitivities, and the sheer diversity of our country, there are few national level developers in India. Large brands such as the Tata Group, Godrej, DLF, to name a few, have gradually expanded to different markets across the country.
Shubika Bhilka, Director, Real Estate Management Institute (REMI), feels, as real estate companies gain scale, receive institutional money and emerge as prominent leaders in their domain, there will be a trend towards expanding their presence across geographies. “A number of companies are gradually diversifying their portfolios to include newer markets, asset classes and it’s likely that this trend will continue as businesses look to develop brands of scale,” she emphasised.
Establishing Brand Identity Before Expanding Is A Good Idea
The year 2017 was significant for the Indian Real Estate sector; there were several amendments that have changed the status of the Indian real estate market. With implementing policies like RERA & GST, the government’s aim is to have market transparency to make the real estate sector much better for investors and consumers.
Abhisekh Bhardwaj, CMO, Shristi Infrastructure Development Corporation Limited believes it’s more important for a company to have a focused vision and efficient implementation. Incidentally, Shristi started its operations mainly from eastern India. The projects developed were mostly concentrated in West Bengal, Assam and North East.
“We didn’t rush to become a national player, our priority was to deliver cost-efficient and quality projects to our customers primarily in Tier II and Tier III cities. Our priority was to establish the brand among consumers before expanding it to Pan India,” asserted Bhardwaj.
However, in the present market reality, it is also important to expand footprints beyond the focused region. Shristi, a Kolkata based company, is now expanding its services in western India, with the first premium housing project coming up in Mumbai. Bhardwaj believe it is the right time for them to become a national developer and expand services Pan-India. However, he also maintained that it depends on developers whether they want to be national players or want to establish their brands locally before expanding.
Rishi Jain, Executive Director, Jain Group, on the other hand, strongly believes that a real estate developer needs to be committed towards the dream that an individual has in mind while choosing a home. “When the developer feels connected and committed towards making the dream a success, the buyers would definitely be content and proud of the home that they have. This rather takes knowledge, willingness, perception and most importantly, passion of the developer, which, we feel; do not need a ‘national’ tag with it. An erudite and committed group of professionals are worthy enough to set the benchmark up,” he insisted.
Time To Cater To MIGs Across All States
Every successful business had a beginning. Its founders usually looked for ways to gradually expand, attracting new customers and increasing monthly revenue as it went. In order to move the business to the next level, expansion will likely become necessary at some point. Whether it means growing one’s product line or setting up an additional brick-and-mortar shop, a long-term growth strategy can make a huge difference. Siddha Group, a prominent realty player, has presence across 4 cities, Jaipur, Bengaluru, Mumbai and Kolkata. According to Sanjay Jain, Managing Director, Siddha Group, the Real Estate Market has a huge demand with less supply.
“The MIGs had been identified with better purchasing power across all states and are looking forward to all buying possibilities. This can lead to expansion of companies. Catering to these states and targeting the potential customers would help in spreading across cities. With GST system imposed, we are able to receive the benefits of input credits across cities, which is a great help for a developer to move to various states as taxation policies do not make the business suffer,” he enunciated.
Compared to last year, the market has improved which brings in great hopes to look forward to optimistic buyers. Moreover, with RERA in scene, this would bring in corporate branding and higher investment opportunities. Time to spread the roots to other cities as well! Of course, if you are in real estate, you better be a national developer. That’s worth as a real player!