Category Archives: real estate

Real Estate and Entrepreneurship: Demystifying Property Processes

Real Estate and Entrepreneurship: Demystifying Property Processes
Smart solutions are the need of the hour in the property sector

Rahul R
Senior Correspondent

With today’s sector-agnostic entrepreneurship resulting in the advent of innovative solutions, it only becomes natural to check for and apply these models to sectors that are generally offbeat. The best example of such a domain is the Indian real estate segment which is often believed, both by consumers as well as experts, to be widely misunderstood.

Today’s entrepreneurs believe that the sector could actually be simplified through technology-driven processes resulting from entrepreneurship. With these, the whole perspective of real estate processes could clearly be communicated to consumers. In this regard, Entrepreneur India interacted with Anjan Rangaraj who is Chief Executive Officer at Chennai-based Catalyst Properties; a property marketing firm which has recently forayed into the big bad world of Bangalore’s real estate offerings.

Anjan is also an entrepreneur with over 17 years of experience in the real-estate domain. He believes that technology-driven management of real estate inventory is the need of the hour displaying favourable entrepreneurial aspects:

Presenting inventory to consumers is the right way to go – A potential entrepreneurial opportunity

“I founded Catalyst Properties 11 years ago. I realised that there were a lot of developers who could develop a good product but weren’t in a position to present it in the right way to the right kind of audience. So I had to come up with the model that was very different from the big players in this segment,” states Rangaraj to Entrepreneur India.

Rangaraj’s statement echoes with that of different entrepreneurial experts (in real estate) who believe that startups in the sector should undoubtedly focus on making inventory, that is clean and free of litigation, reachable to the audiences through technology-driven models in marketing or the very way in which inventory management is handled.

Rangaraj adds that it was a technology-driven partly underwriting and partly marketing model that clicked for Catalyst. Here, the wannabe startup owners could consider offering clutter-free consumer-centric models through which both marketing as well as finding property becomes easy.

“Today technology is a must,” re-iterates Rangaraj.

Mitigation of issues encountered during critical processes

With automation and futuristic technology viz Internet of Things (IoT), Artificial Intelligence (AI), and Machine Learning (ML) presenting a potential opportunity to solve plaguing problems, Entrepreneur India sought to know from Rangaraj as to how application of technology could lead the way for Indian real estate.

Rangaraj believes that the entire marketing process could be digitized. Startups could also come out with customized intelligent solutions for digital marketing so that necessary data is generated and properly evaluated at the initial level itself.

“We have a CRM which is thoroughly worked around what we actually do,” informs Rangaraj stressing on the need for smart technology-driven solutions.

Giving rise to new trends

With real estate in India showing clear signs of getting corporatized, going by the CSR initiatives undertaken by major real estate players including Catalyst, there are bound to be new trends which could do more than just ape the west and actually offer consumers extended facilities.

A trend in this regard is that of shared workspaces coming up adjacently with even residential units developed by major companies. Now, this is a sure shot entrepreneurial trend, which could foster the startup founding spirit within people who are also buyers of these residential spaces.

Experts believe that co-workings places alongside residential dwelling units are to encash the startup culture, prevalent in cities such as Mumbai, Bangalore, Chennai, New Delhi, Pune and more. Here, a buyer could choose a new residential unit just to ensure that he/she gets to enjoy both dwelling as well as access to premium office spaces at affordable prices whilst starting a new venture within these office spaces. This potentially eliminates the need to actually travel long distances to reach places of work.

“If you have to create a good product you have to create things around it. And only if you have a good product you will be in a position to sell. There are so many things which can actually benefit each other and co-working spaces is one of those things,” states Rangaraj categorically.

Property Management Startups are Setting New Trends

Property Management Startups are Setting New Trends

Nagaraju M
CEO – Rentprop4u

The rental market in India is growing at a rapid pace. While most middle-class Indians aspired to own a home earlier, people increasingly prefer to take a property on rent than buy one these days.

With job mobility becoming quite prevalent, especially among younger people, many of them think that owning a home is more of a burden. Renting gives the privilege to move cities at your convenience and stay in a locality of your choice. You don’t have to shell out huge EMIs for the dream property you own. And if you cannot be bothered furnishing the home, you can opt for a furnished property and also get help with housekeeping.

One of the main reasons for the growing preference to rent a home is the high level of migration within the country. People move between cities for jobs quite frequently. When you are new to a city, you’d rather rent a home than buy one.

For migrants, it’s not easy finding a property of their choice in a new city where brokers do not speak their language. Add to it the woes associated with lack of documentation and huge security deposits.

The owners, on the other hand, are faced with a different set of struggles to manage their properties. Gone are the days when relatives and friends used to take care of the property in your absence.

The growing preference for renting as opposed to buying and the pain points of the tenants and owners have contributed to the growth of property and rental management start-ups in India. More than 30 million NRIs living in 130 countries across the world has also given a boost to these start-ups.

These start-ups have made lives easier and hassle-free for both tenants and landlords.

One-Stop Solution for Owners and Tenants

It’s imperative that the property is taken care of and maintained well to earn a good rental income. From finding the right tenant and performing a complete background check to offering assured rentals and taking care of repairs and maintenance, these start-ups offer complete rental and property management assistance to owners.

They not only help tenants to find the home of their choice but also assist with documentation work and rental payments. Some start-ups even help with moving in and utility connections.

With a rapid growth in the number of people migrating from villages to cities, it can be estimated that around 60-70 crore people will be living in urban areas by 2030, which inevitably increases the demand for residential property in India.

In fact, it is estimated that real estate will be the third largest sector by 2030, contributing more than 15 per cent of the Indian GDP. Also, real estate is one of the largest employers in India providing jobs for more than 75 million people. With as many people moving into cities, there has been an increase in demand for rental properties. The booming rental market and high demand for residential spaces have created a demand for property management services too.

Lack of time has prompted numerous property owners in metropolitan cities to resort to the services of property management consultancies. Not only can they maximise their profits, but they are also spared the hassle of collecting rent, repairs, taking care of tenant complaints and marketing the property to find the right tenant.

These services have also come to the rescue of NRIs who want help in managing their properties back home. They need not fret about the security of their home or its maintenance while they are away from the country.

Startup Disruption in Indian Real Estate Through Technology-Driven Solutions

Startup Disruption in Indian Real Estate Through Technology-Driven Solutions
80% of the industry is unorganized and a task for a startup is to get professionals

Nirupa Shankar
Guest Writer
Executive Director at Brigade Enterprises Ltd and Brigade REAP

The Real Estate sector in India is ripe for technological disruption as it is heavily dependent on unskilled labour for construction. The Construction industry spends less than 1% on technology, one of the lowest percentages across all industries. Construction labour productivity has not kept pace with overall economic productivity. Even on a global level large projects take 20% longer to finish scheduled and 80% of the projects overshoot budget. These figures are ratified by McKinsey and Company in a 2016 report on Disruptive Technology Trends.

One regulatory disruption in the Real Estate space has been the introduction of the Real Estate Regulatory Act (RERA) – which has impacted operations and business viability for many developers across the nation. While the act is consumer friendly, requiring developers to deliver projects on time and provide quality products, the act also places onerous restrictions on developers. For instance, the act severely limits the fungibility of monies raised from a particular project and has harsh penalties for delays even if the reason for delay is beyond the control of the developer. This creates more reason for developers to adopt technologies that can help them in the following:

Plan better / enhance operational efficiency

Control costs

Save time

Deliver quality, snag free apartments

Increase customer satisfaction

However, despite all the issues waiting to be resolved, adoption of technology is fairly limited. The reasons for this are many. While developers are looking for solutions to help them be RERA compliant, it is found that there is a lack in:

Plug and Play Solutions: Many of the start-ups with solutions focussed on the real estate space require a lot of tweaking to their current business model in order to fit in to a developer’s existing systems and processes. Since 80% of the industry is unorganised, the start-ups need to work with the few developers who are professionally run, using established ERP solutions or those who are ready for tech adoption. Developers also keep in mind the cost-benefit of spending time to tweak and implement a solution by a start-up as opposed to working with more established technologies and solutions.

Must-Have Solutions: Most of the existing services offered are “nice to have” services that a developer is not keen to pay for. Unless a service or product can show concrete savings in time or money, or directly attributable increase in revenue, a developer will not want to pay a monthly or annual fee for it. He will ask for a success based fee which will require a clearly defined outcome.

Scalability: Every company has a trajectory for growth. Just like how medium sized companies struggle to make the quantum leap from mid-scale to large scale, many young companies struggle to make the leap from start up to small-scale. At every stage, companies go through growing pains and the need to scale up is a constant pressure for founders. It is often found that a developer gives a proof of concept (POC) opportunity to start up to “try out” their service.

The start up might do a good job with the limited scope. However, when the same start up is asked to implement the service across all the developers projects, it will struggle to keep up timelines, quality and cost due to recruitment challenges of finding quality talent, retaining quality talent or the ability to create processes that work seamlessly or lack of back-end support and tech to scale up exponentially. This creates lack of confidence in a start up’s ability to handle large quantum of work.

Sustainability: Every company has problems. It’s just that different companies have different types of problems depending on which stage they are in. However, the focus of creating a sustainable company is one that can scale up while being profitable or at least see profitability at the end of the tunnel.

This is to ensure when developers put their faith in a start-up, work with do not suddenly come to a standstill or the start-up does not suddenly wind up and close shop one day due to lack of funds or a founder quitting. It impacts the developer’s ability to service his/her customers thereby impacting reputation.

Bottom Up Buy – In: Lastly, buy-in from the developer’s team is essential for technology adoption. Unless there is buy in from the people who are required to implement the solution or adopt the product, progress will be slow. Adoption of technology does not happen top down.

Staff down the ranks will find a reason for why something does not work unless they have “buy in” of the product / service and that means clearly knowing “what’s in it for them” or having clear visibility on the benefits of the product or service.

If these roadblocks can be addressed by young companies wanting to disrupt the real estate industry, there is nothing to stop them. The industry is their oyster.

Why Going National is Now Critical for Real Estate Players

Why Going National is Now Critical for Real Estate Players
With RERA and GST, it’s time to spread wings nationally

Baishali Mukherjee
Freelancer, Entrepreneur India

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!