Real Estate Development – Staying Ahead In Challenging Times

Kishor PateKishor Pate, CMD – Amit Enterprises Housing Ltd.

In a slow economic environment, the only way in which to grow one’s business is by taking it on a war-footing. Conducting business on a war footing can be defined as being ready and prepared to take on or sustain war.

A related concept is ‘war economy’, which is a term used to describe the steps undertaken by an entity to mobilise its economy and resources for war production.

However, in the context of real estate development, going on a war-footing quite simply means assuming a mind-set that focuses on producing, mobilising and allocating resources to not only sustain but exponentially grow business.

Get Out Of Denial Mode

There is a problem and it is not going to go away by assuming an ostrich-like attitude to it. The best way to deal with an economic crisis is to admit and accept that the crisis prevails. The real estate company – from leadership to employees – should not be in denial of the situation.

Get Into Innovation Mode

In times of economic uncertainty, real estate companies rely on innovations in marketing, sales and customer service to maintain and to expand market share. One of the prerequisites for running a successful real estate development company in such times is offering clients that decisive bit of extra that clearly defines the products as superior, and going the extra mile on pre-sale as well as after-sale service.

Know Your Opponents

To win a war, one must know one’s own strengths but also those of one’s competitors. Real estate is a highly competitive business, and it is necessary to evaluate the competition on a regular basis. This will help in defining success strategies.

Change The Game Plan

In order to retain and increase market share in challenging times, real estate developers need to adapt by changing business models which are no longer working. A 360-degree approach change to capitalize on the prevailing market condition has helped many real estate companies to not only survive but also retain their market leadership.

real estate development

Ramp Up On Employee Management

In a slow market environment, real estate developers must take advantage of the fact that this is, in fact, the ideal time to recruit the most talented people. Management needs to open their ears to ideas on how business can be improved which emanate from within the ranks. Creating ‘think tank’ groups is an ideal way to harness the collective power of mind merge.

Study The Market Like Never Before

In a challenging business environment, it is extremely necessary to develop greater insights about one’s customers, the manner in which the business is changing and what kinds of new technologies can be adopted.

One can then develop frameworks that clearly indicate where clients need better services, and address those needs in a proactive manner. The mantra needs to be ‘service improvements’ rather than ‘business improvement’, because improved business is a direct outcome of improved services.

In today’s times, every real estate development company needs to follow the strategies that have historically worked for businesses that set out to grow in a competitive market:

  • Identify and focus on your ideal target market – then strategically broaden your horizons
  • Cultivate a and grow a comprehensive database of prospects, vendors, past customers and future prospects
  • Distinguish yourself from the competition – extend exceptional customer service. Under-promise and over-deliver
  • Communicate with your target market on a consistent basis. Do not ignore the strengths of the competition, but articulate how you are different

 

Image courtesy of nokhoog_buchachon / FreeDigitalPhotos.net

Investing In A Luxury Property In Pune

Kishor PateKishor Pate, CMD – Amit Enterprises Housing Ltd.

During 2013, the investment potential for residential properties in the financial capital of Mumbai remained largely flat and unexciting. Most serious property investors in Mumbai who chose residential property are now content to exit with moderate profits.

Pune, on the other hand, showed an almost uniform appreciation of 14-16% in property prices. Vacancy levels in Pune stand at between 20-22%, while in Mumbai they are close to 35%. As a result, investors are staying invested.

One question being asked by investors interested in Pune real estate is whether they should prefer mid-income or luxury housing. To be sure, Pune has a number of options in both segments.

Mid-income apartments are definitely the faster-moving product on the market. However, luxury housing in Pune has been getting a lot of exposure of late, mainly because it is a much more vibrant segment in this city than in Mumbai.

It has been argued that Pune has seen far too many luxury projects being launched in the last two to three years. However, the fact is that these projects are not aimed primarily at property investors but at NRI and HNI buyers who are purchasing such homes for personal use.

Property investors focused on Pune have always been more interested in acquiring mid-range flats which they can dispose of faster. This is a limited perspective, usually brought on my budget constraints.

There is, in fact, a very high demand for luxury property in Pune from self-use buyers, which is why developers continue to see sense in launching premium housing.

It must be remembered that as long as there is demand, supply will follow. And as long as the demand is from buyers who wish to own such properties for personal use, there is no glut on the market – these units will not be put up for sale again for a very long time.

For this reason, investment in luxury property in Pune does make sense for long-term investors. These are premium offerings in locations which will eventually not be able to accommodate further development.

Living dining room small
Living Dining room in Arcadia, Sahakarnagar

However, it is a play which requires high investment power and the ability to hold on to the property for at least five to seven years. After such a period, the real estate development potential of a location which is popular today will be almost exhausted and demand will begin peaking.

There is no doubt that demand for luxury housing in Pune is very sustainable. An increasing number of multinational companies are recognizing Pune’s unique advantages in terms of trained manpower, cheaper real estate costs and reduced logistical hassles.

The result is that more and more high-paying jobs are being created every year, which leads to a steady demand for high-end homes. At the same time, more and more NRIs from Pune who have completed their high-paying tenures abroad are returning every year.

Obviously, luxury homes in key areas such as Aundh, Baner, Sahakarnagar, Kalyaninagar and Viman Nagar will become increasingly valuable over time.

But within a span of five to seven years, even newer areas will have been made valuable because of increased infrastructure and accelerated saturation. Investing in a luxury property in such an area today can pay off handsomely over the long term.

Finding The Perfect Location For Investment Property

Kishor PateKishor Pate, CMD – Amit Enterprises Housing Ltd.

When it comes to profitable investment, property is still one of the most lucrative avenues. Profitability is not a given, however – investment property must make sense from a returns-on-investment point of view. In that respect, one must pick from available options carefully.

To judge whether investment property will deliver the goods in the long run, one must consider many variables. Paying attention to these will maximize resale value in the future. However, the first aspect to factor in while buying an investment property is location. Location, as professionals know, is the most decisive factor in property investment

What makes the perfect location? One should not judge only by the actual site of the investment property, or even its cost. Land and property rates differ from area to area, and this is an important consideration as far as the resale value of an investment property is concerned.

The general state of the locality is important in terms of overall investment value. Next, proximity to major highways and roads is desirable for investment property, because ease of travel and supply of essentialities adds to a property’s value.

The ideal location for a residential investment property would be somewhere towards the centre of the residential neighbourhood, where large vehicles do not have access.

Amit's Sapphire Park
Amit’s Sapphire Park

While judging the locality of a residential investment property, the existence of proper communal infrastructure should be ascertained. Facilities such as shopping and grocery outlets, schools, public transport, medical facilities and means of entertainment should be close at hand.

The worth of a constructed residential property is not decided merely on the basis of land value, but also on the surrounding infrastructure that adds to the value of a location. The value of an investment property will appreciate over the years only because of the overall conveniences the property and its location will provide to future buyers.

For a commercial investment property, proximity or ready access to local business hubs works best. The existing mix of business occupiers plays a vital role, as does the presence of business-centric facilities such as telecommunication services, a post office, public transport, etc.

A commercial investment property that is also close to a residential hub is ideal, since this means that there is balanced real estate market growth in the locality.

While buying an investment property, one should remember that property investment should be based on long-term profitability objectives. Speculative property investment harms the sector and can often lead to personal financial loss, especially if one has not judged the market properly.