Thursday, 17 April 2014

Ifs & buts |

Ifs & buts |

Some key policy issues in the real estate sector await a new government

Ifs & buts
The challenges for an incumbent government, as far as the realty sector is concerned, is going to be determined by a slew of policy measures that have been hanging fire – waiting for a new political dispensation to come in and deliver.

Last week, the central government issued revised draft guidelines for urban and regional development plans formulation and implementation, which were also shared with state governments.

The draft guidelines made two broad points:

>> There are 11 million vacant housing units across the country of which a sizeable 10 per cent are within the national capital region (NCR)

>> Figures confirmed the housing shortage to be 19 million units, the maximum shortage being in the ‘affordable housing’ segment.

Sudhir Krishna, secretary, ministry of urban development, put across this point well: “The urban population of 31 per cent is still too low given the population and size of the country and continues to put too much pressure on rural resources. The urban population is likely to grow exponentially over the next few decades and is likely to pose a big opportunity and challenge to urban planners and builders. We need to be prepared for an India where at least 70 per cent of the population will eventually live in cities.”

According to the ministry of urban development, “Studies have highlighted the urban housing shortfall to vary between 19 and 25 million units. However, as per the 2011 Census, there are 11 million housing units lying vacant across the country of which 10 per cent are within the NCR itself. The focus needs to be not just in housing but planned urbanisation that is inclusive of regional planning and takes into account holistic social and economic development of the population.’’

Points out Sachin Sandhir, managing director, RICS, South Asia and host of the meeting, “Real estate is one of the key drivers of the Indian economy. In fact, issues such as growth of manufacturing sector, single window clearance, cheaper institutional financing and improved market transparency have the potential to further galvanise the sector.’’

According to Sandhir, two announcements — the Real Estate Regulation Bill 2013 and draft guidelines on Sebi (REITs) Regulations 2013 — have the potential to change the fate of the sector. If implemented, these will not just bring greater transparency but will also help boost investments in the sector. However, he admits, their enactment as a law may take time.

But is the regulation bill well poised towards the affordable housing demand, the country’s most dire need? Explains Anupam Saha, co-founder and business head RealtoExpress: “The bill promises to bring in more transparency and protection for the end consumer from the unscrupulous player in the value chain but its success will remain tied up with its successful implementation. Though the bill doesn’t cover new projects on less than 1,000 sqm plot area, affordable housing at a large scale can only come up in plots that are bigger than these guidelines. Also, getting approval for such projects from government agencies may get delayed because of multiple prerequisites which may not help the industry in offering affordable housing to the common man.’’ That is bad news.

But Saha agrees timely delivery of flats with correct information of carpet area and other project details with complete clearance during the purchase of house will bring in more confidence among consumers – a factor designed to bolster improvements in sentiments and trust.

And how will draft guidelines on Sebi Regulations, 2013, help? Explains Saha: “It will bring in more funds in the real estate market by offering an alternate investment vehicle for retail investors. These investment vehicles will put money mainly in projects (commercial/residential) which will generate income in the form of lease which will be then divided among the investors as dividend.”

According to some analysts, the Sebi regulation will be a boon for many projects that are stuck and will be able to come back to life once transparent source of funding is made available to them.

They also say that the strict guideline of minimum corpus of Rs 1,000 crore will make sure that fly-by-night operators are not encouraged to open business and exploit the investors but at the same time open up the liquidity tap for the approved projects. That is, what the industry needs in any case.

Most analysts agree that 2013 was a year of much economic turbulence. High retail inflation, high interest rates and a continuous fall in the rupee value, had slowed down overall growth and hindered investment sentiment.

However, they say that the recent decline in current account deficit (from 4.9 per cent of GDP during April to June to 1.2 per cent of GDP in July-September period) and a slight rise in industrial and agricultural output have given marginal relief. Okay, it may be no great shakes but just a mild bounce from the current slack in the economy – given the circumstances, even that provides optimism.

But even in this bleak scenario, of all growth-oriented sectors, real estate drew a significant amount of the total pie of investments despite a fall in the number of deals as compared to year 2012.

Obviously, growth in the real estate sector cannot happen in isolation. While investments have come down, potentially it holds out hope. As per industry estimates, around $2 billion is parked with private equity firms ready to be deployed in real estate, but funds want to put in money in projects with strong fundamentals. Says Sandhir: “Factors such as lack of professionalism, high degree of fragmentation in the market, shortage of qualified professionals and a partial paralysis on the policy front have led to a decline in investments.” In a broad sense, not much different from some of the other sectors.

The overall economic climate, coupled with inflation and high interest rates, is keeping buyers at bay. If one is to believe the current trend in the economy, there is hope that 2014 – particularly its latter half with a government in place – would bring in some good cheer for the market.

While the market witnessed a drastic fall in sales across regions, property prices in some of the established markets dropped on account of an oversupply situation. However, in most regions, especially in emerging areas with ongoing projects, developers continued to hold on to their prices making some locations, frankly, unaffordable.

On the markets front, while office space witnessed improved transactions through the first half of the year, retail segment continued to face challenges such as supply of quality spaces affecting overall absorption. The residential demand improved during 2013; however, developers continued to struggle with unsold inventories and reduced cash flows for construction.

In addition, there were some correctional measures too. The Reserve Bank of India (RBI) asked banks to call off the dubious 80:20 and 75:25 schemes, as the banking regulator felt such products increase the risk for both banks and borrowers especially if there is a dispute between the buyer and the builder or if the project is not delivered on time.

The apex bank also advised other banks to closely link home loan disbursal with the stages of construction of a housing project. The move puts a check on price escalation, as it will dissuade investors or short-term buyers from investing in the otherwise popular under-construction projects.

A quick look at some expectations and scenarios in 2014:

Commercial real estate: Supply of commercial spaces has grown relatively faster than the demand in the past 10 months. Due to an oversupply situation in certain key markets, the capital values of office spaces have bottomed out. Rents on the other hand have remained stable or flat. Sentiment of occupiers has been hit on account of deteriorating levels of growth in the economy, continuous fall in the rupee value, high retail inflation and subsequent rise in key policy rates. If the situation continues to be as it is now, there could be a drop in transactions in the commercial segment in the new-year and vacancy rate, especially across the office sector will increase further. It would then take at least a year for sentiment to revive.

Residential real estate: Residential real estate assets remain sought after among investors and buyers, especially those properties which are mid-sized and priced reasonably, and offer location advantage and good infrastructure. While there is demand for affordable housing, premium properties too have attracted some buyers in cities such as Bengaluru, NCR and Mumbai. However, most of the demand is in the Rs 3,500 to Rs 5,500 per sq ft segment.

However, going forward the, supply situation will remain subdued due to the deferred completion of a number of new projects and reduction in number of launches across both the categories. Therefore, residential prices will witness marginal increase in 2014. Supply levels are likely to improve in the second half of the year 2014.

Till then, the decline in number of launches will help property owners to firm up their rents and also help new sellers in the resale market to demand more.

While the situation is not what it used to be in the boom period between 2006 and 2008, buyers can be cautiously optimistic of a healthy recovery; they can bargain for some discounts on the quoted rates in new launches. And that is something you could not have said in 2013.. 

Tuesday, 15 April 2014

Friday, 11 April 2014

IT tools to catapult home grown Indian Real Estate Consultant into World biggies.

Taking a Global view; the top Real Estate Consultancy organizations worldwide are one of the biggest influencers in world decision making. Organization like Century 21, Remax, Ray white and a few more through their sheer franchise network across the globe touches billions of people and guide them to take one of the most important decision in life, to choose a house.

Indian Real Estate Market over the last few years been categorized as hot destination for investment as there is a growing demand for Residential, Commercial and Retail Space. It is expected that Indian Real Estate market will grow from a size of USD 55.6 Billion in 2010-11 to USD 180 Billion by 2020. Growth in the sector is predicted to be contributed by Retail space, Hospitality, Education and healthcare sector apart from Residential. Despite of having such potential, Indian Real Estate Consultancy firms were never able to create such brand name which is comparable to the world best. The unorganized nature of Indian Real Estate Consultancy till now was pulling back sector to create giants who can compete with the world leaders. It has also been gravely faced with issues like - absence of standardisation, lack of adequate knowledge sharing etc.

But lately few Consultancy Organizations are showing potential and are giving good alternatives to the International leaders who are trying to expand their franchise network in India. These players are taking advantages of the home grown IT products which are enabling them to manage their entire end to business processes. Let it be campaign management, contact management, lead management, task management, property management, project management or transaction management and calculation of ROI; products from RealtoExpress, Salesforce and SAP are changing the working style Indian Real Estate consultancy firms.

Such CRM or ERP solutions are becoming the backbone of the empire that the new age consultants are trying to build up. India is undergoing a demographic transition and is gaining economically from the changing age structure. India’s youth population (15-32 years) comprising nearly 40 per cent of the urban population is fast becoming a new set of consumers for whom marketers are working their way up to delight. To capture these set of consumers Real Estate consultants in India making their presence felt in the Online Media which is the regular play ground for these consumers.

Consultant are showcasing their products in their own Real estate portals with dynamic content with feature like Instant Proposal with relevant information & Pictures, Instant cost sheets creation  and on the fly mailing. IT once again is enabling the consultant to do the same. Advance CRM / ERP are now offering on the fly sync which helps in keeping data synchronized between the portal and CRM. You change anything project and property information in the CRM and publish it in the Portal in seconds. Incoming lead from website directly land into CRM.  Such IT tools are making the life of a Consultant much easier by eliminating the Manual process.

ERP products from RealtoExpress had already built in the best of the business processes of the Industry which the Real Estate Consultants can start implementing from day one. Such solutions are offered through Cloud model where consultants need to pay for as much they use. Such services are offered on SaaS/cloud model where the client is required investing in the usage of application and forget about managing the associated hardware, software and upgrade cost. This reduced the upfront IT expenditure offering a cost-effective business planning option for the consultants thus enabling them for future growth. Clients are only required to have a laptop and internet connection and they can have their CRM /ERP solution securely anywhere anytime.

Such IT solutions are guiding the Indian real Estate consultant to make the basic correct which with a proper vision can become the building block of a world class organization. IT need to be the part of every department, be it marketing, pre sales, post sales or accounts.

Real Estate Consultants in India are taking up campaigning in a more methodical way. The new age CRM / ERP systems had given them a tool to extract categorized data for targeted campaign which in turn had given them better ROI. As the volume of business had decreased in the past year such IT solution had helped the organization to maintain the sustainability. CRM / ERP solution had helped the Real Estate Consultants to increase their lead conversion efficiency.

International solutions to manage Booking and Transaction Management for Indian Real estate sector had never been much hit as it never accommodated the complex requirement of payment plans and other charges of the local builders. But home grown IT solution providers with their local knowledge base had provided such tools which apart from accounts management allow a consultant to manage multi city multi team setup with ease. RealtoExpress had remained front runner in identifying such requirements and development of advance solution.

Going beyond the consumers, India Real Estate consultant are embracing social media to connect to their associate network beyond city limits. This kind of setup enables the consultant to offer products from Delhi to consumer belonging to any part of India and vice versa. Fine tuned social media tools which can be implemented internally within the organization as well as externally can help the consultants to extend their reach.

Taking ERP/ CRM and Social media together, Social features will also get embedded in internal CRM / ERP solutions and will become a part of any digital commutation with clients or employees. Email communication will slowly take a back sit in favour of social media tools which are faster in reaching out in an organized way to wider audience, thus chances of closing a deal in least time become highly probable.

Year 2014 will be the year of “Social Revolution” in Real estate where Consultants  will close more deal by reaching other Real Estate Consultants and the new breed of consumers “Todays Youth “ who aspire to be big and are mobile, social with ready disposable incomes. One such offering offers B2B platform for the Real Consultant where anyone is allowed only after proper verification. The same system allows the users to like dislike any property or requirement posting thus automatically segregates the fakes. This in turn affects the Network score /rating of a consultant which is a credibility stamp.

Such Platforms are bringing in consultant from PAN India on the same level and truly speaking “Idea is no one monopoly”. Once a platform with all possible resources are made available, a truly global idea can be developed and execute by anyone. If we see the recent past it had been observed that experts from other  industries are slowly moving into Real Estate Consultancy. They are nurturing and building up professional organization with world class service mission. So when the People with vision are supported by proper business process which in turn is completely system driven it truly lay the seed of a world class organization.

Wednesday, 2 April 2014

Real Estate as a Career Option

A career in Real estate in India has always been treated as one of last option by any bright student till few years back. Though Real estate is spear across wide specialization areas, brokers has always been treated as the face of the Industry.  Till few years back it was well said in the society that “If you can’t get a job be a Real Estate Broker”.

But with the boom in Real Estate sector in India in last few year professionalism had got into all the verticals of Real Estate. We can broadly divide the complete value chain of Real Estate In the following sections.

If we look into the Developer, Finance and the Construction verticals professionalism had made a mark long back. Developers and Construction companies do employ people with skills in the area of Engineering, Project Management, Construction, Safety and IT. Finance companies engage people with skills in the area of Project evaluation, Fund Management, Risk Evaluation and Lawyers.

These verticals have always attracted best of the talents from reputed Engineering, Management and Law schools from across India.  Remuneration for the jobs in these sectors has always been at par with other industry and it had provided a very good growth opportunity at the same time.

Real Estate Consultancy in India was the only vertical which was till few years back didn’t attracted the best of the talent. But lately with the change in the end client profile the consultants had change themselves too. Talent from other service industry are switching their career and becoming real Estate consultants. Professional has become mantra of the day for the consultants. People with good communication skills, knowledge about the industry and the product are replacing the older generation consultants who focussed more on commission only.

The new generation consultants are now guiding their investor on how to get better ROI. Apart from the superior sales skills the consultants need to have good knowledge in their area of specialization, be it commercial or residential, resale or new projects.  If a person in specialized in corporate or commercial leasing he/she must have a good negotiation powers also at the same time must ensure that the tenants are satisfied. The consultants must also have the skill to gather great deal of local market data, do research on them and then cater to the high profile clients who generally invest in these segments. Same situation is applicable to the Residential area.

Real Estate Consultancy as a career offers a lucrative commission structure and as the new age consultants are bringing in best practices and tools from other industry they are able to generate more volumes thus increasing their monthly take home.

Careers in property management are generally salaried positions that include several other allowances and benefits. Initially they can expect Rs 20,000-25,000 per month. An assistant property manager should expect to make 40,000-50,000 per month. On the top level a real estate manager can earn a salary of 70,000-1 lakh per month and also can expect an annual bonus along with other fringe benefits.[1]

In India Universities like Amity and Ansal along with Organization like NAR India had already started various courses to help student make Real Estate Consultancy as career options. These Schools had already laid the foundation stone and few more organizations are already in advance stages of starting Skill development schools for Real Estate.

As the Real Estate sector is looking forward for government policy changes it will generate huge employment opportunities for skilled manpower. So more schools will come up with courses which will develop skills for Investment Management, Asset Management, Valuation, Credit Management, Advisory and Consulting, Corporate / Commercial Property Management, Building Control Management and many more.


Thursday, 6 February 2014

Now, realtors join the networking platform bandwagon!

Fast realizing the potential of web-based networking platforms, Real Estate Consultant is now amongst the recent business community to join in.  After the success of many businesses’ across  industries , Real Estate is now following suit to resort to Social Media platforms to connect, network and grow their businesses. Realizing the changing temperament of the digital age’s consumer; consultants too are gripping with the trend to connect and do their business online. Offering networking solutions to the consultants present today are an array of web-based networking sites, which offer a phenomenal web presence and visibility to the consultants. 

One of the prominent ways in which the consultants’ are getting benefitted through such platforms is lead generation. This is becoming a pivotal requirement for consultants to carry out their business operations. The crisis in the industry today is demanding of innovative means for consultants to do their business. Social Networking is a refreshing and popular way, through which consultants are resorting to different social sites and getting benefitted.  

Online networking platforms are attracting both Sellers & Buyers in numbers, where by virtue of sharing data and information of the available inventory, they are able to reach a wide base of network. Real-time sharing of information, regular updates and consultancy within the group, approaching prospective buyers or sellers online are some of the ways through which Real Estate Industry is redefining the landscape of its business operations. 

As many as 30% of realtors today are using real estate search engines to increase exposure and convert in lead generation. While on the other hand savvy realtors up to 80% of the present market are using FB, twitter and LinkedIn for better business opportunities, networking and referrals. Creation of promotional pages, blogs and online groups is presenting newer tools to realtors to better profile their companies amongst their target audience. 

However in the midst of this information explosion, it’s important to reach the targeted set of audience through most effective, accurate and specific medium. Since, any overexposure to the brand may also be degenerative to the business. (CMD) is one such online platform that offers free promotion for realtors and their business in the Real Estate domain. Through this platform, realtors get to connect and learn from each other. CMD is a very relevant platform, through which online marketing of listings and an easy access to preloaded database of projects is possible. 

Just by virtue of a small query Consultants can yield a number of responses from agents or brokers specializing in a specific geographic region or area of real estate. This type of interaction with Realtors at such a platform in the market is a great way to build a credible reputation and build brand recall for future consideration. It’s a fact that in Real estate 60-70% of the deals are being facilitated by Consultants only and social solutions like will help to boost up this industry figure.

The two way information flow within Real Estate agents and end customers is facilitating quickness, promptness, consistency and authentication, bringing standardization to this otherwise disorganized sector. 1500+ and growing project data covering Delhi/NCR in will enable the Real Estate consultant to link their inventory to specific project which can then be exactly searched out by other consultants when any lead flows into the network. Such social media tools along with a good CRM like RealtoExpress can fully automate the complete lead cycle of a Real Estate Consultant which will result in prompt and professional services for the end consumers.  


Friday, 10 January 2014

IT in Real Estate “A Market within a Market”

Indian Real Estate sector in 2013-14 witnessed mixed growth rate than what was predicted at the start of the financial year.  The price correction across segments of didn’t happen as predicted but the volume of number of transaction had come down considerably. In this kind of mixed market scenario those Real Consultant who had focussed more on Resale and Leasing along optimizing their business processes with help of IT had outshined the competition. In last one year a trend had been observed that those companies who had successfully put in proper IT systems whose base had been an ERP or CRM had increase their employee count steadily along with increase in per employee revenue.

Cloud based ERP systems had major inroads last few quarter in Real Estate vertical, the driving force mainly was the new generation digital consumers who always demand services at the finger tips be it on the mobile or laptop. India has undergone a demographic transition in recent years and is gaining economically from the changing age structure. India’s youth population (15-35 years) comprises nearly 40 per cent of the urban population they fast replacing the prime decision maker in a normal household. SME in Real Estate i.e. the Consultant have lately identified this segment and had changed .

Understanding their consumers well, the New Age Real Estate Consultants today, are happy to bring in professionalism and transparency to their work, aided by cloud CRM solutions like Salesforce and RealtoExpress. Consultants are immensely getting benefitted as such softwares are not only helping them in bringing more efficiency, but is also helping them grow almost double up their profits in lesser time spans. This in turn is giving an impetus to deliver the very best for their new group of young & affluent consumers.

Other IT systems to manage the campaigns, transaction, accounts had also gain popularity. But the SME are looking forward for a single solution which covers their end to end business process starting from managing their contacts, leads, Inventories, Project, Bookings and Transactions. Integrated IVR solution with CRM had also created a niche among the Consultant.

Traditionally CRM / ERP solutions had been targeted for large scale enterprises who were able afford and maintain a dedicated IT team. Legacy solution always required a dedicated team for development and maintaince for each setup. But with the advent of broadband and latest cloud technologies innovations is ruling the market.

Being an SME on premises legacy systems never fitted into the cost model of the organization. SaaS had changed this game. It made lot easier and cheaper to opt and deploy enterprise level software for an SME organization. In most of the cases the implementation and ongoing maintenance cost is 60% - 90% cheaper than those legacy solutions. SMEs can start small and then scale up as their business grows. E.g. initially if an SME has 5-10 employee then he can subscribe to that many SaaS user account and later add on as the business and employee number grow. 

 Marketing has always been one of the key of success of an organization. To reach to new generation target clients Real Estate consultant had started using international service providers like Amazon, Google and  Facebook.  Though these services were generic in nature, the usage of such platform had opened up new opportunity for IT solution providers to develop niche products for Real Estate vertical which covers all kind of campaigning. 

Business Networking Solutions like has come into existence where this B2B platform allows verified consultants only. Such specialized platform allows consultants to talk across geographical boundaries and close deal which was earlier never possible in a click of a button. platform also offers a rating system where every member is rated based on their activities. Thus if SME need to contact and unknown associate he can rely on the platform rating to judge the reliability of the person who is offering him a deal.

This kind of solution also brings in Region specific project information where each and every information is preloaded in the platform. This helps in reducing the information fragmentation which is currently a trouble area in the legacy systems.

Because of the current market scenario where the business is not happening as per the expectation the whole value chain is looking for innovative IT solution which will help each players to become efficient and productive. 

Wednesday, 1 January 2014

"Various Trends in IT Domains in 2014"

India is currently witnessing the 2nd generation telecom revolution where data services are gaining more popularity. The coming year will see more and more solution for Enterprises and SMEs taking advantage of the increased Mobile Broadband penetration. Since the end clients is consuming more and more information on their mobile and tablets, organizations will be targeting these screens to make their services available in the hand of the consumers. Same will happen with enterprise solutions. CRM and ERP software will get out from the standalone computers and will move into the hand of the employees in a bigger and efficient way. Employees will be able to access and perform much of their activity on the move.

Real Estate industry will also witness the same level of automation. The client facing organizations of the overall value chain who are the Real estate consultants had already embraced various CRM and ERP application to manage their day to day activities starting from Campaign Management, Lead Management, Task Management to Property, Projects and Booking Management. Indian Real Estate consultants are primarily using solutions from SAP, RealtoExpress and Salesforce who are in top league in the complete IT value chain. As the acceptability of the CRM / ERP is gaining popularity these organization are now looking forward for solutions which will make them more mobile. The job role of these consultant forces them to be in the field for longer time but at the same time they require ERP tools which can make them more prompt and efficient in their services.

In the coming years Real Estate Consultancy Industry will also see analytical tools to be used in their day to day activities. These tools will be used to determine which existing clients to be targeted be it “pitching new products” or “selling of the existing inventories” of the clients. A CRM / ERP system will enable an organization to manage such activities efficiently.

Sales forecasting tools will also mark their presence in this sector as more and more organizations managing their data in system which will provide them a live database which they can use. It is expected in the coming year such tools will make a difference in Real Estate Consultancy vertical as it had done in other industry in the past.