Irony is that the real estate developers in India are, more often than not, having inwardly obsessed approach to accept their true brand standing. However, such a mirage may be more reflective of their aspirations for the brand rather than the reality of public opinion
India may be having one of the largest and most promising realty sectors in the world, but when it comes to pin pointing dependable and strong brands all we can see are a few blinks on the radar. The business of real estate has traditionally been pretty opaque in India. For an average home buyer, the process of due diligence has been confined to cross checking the title clearances and bank finance. Even the consumer experience, gauging through the social media channels, is confusing amidst the cacophony and contrasting feedback.
There is no debating the fact that developers in India have been mostly unorganised and not corporate in their operational efficiencies. Add to this the fact that the business has been pretty localised to give a serious thought to creating a brand. The focus has always been on the sales channel, and more often than not the recognised brands were the ones that were operating in multi-city and delivering volumes.
The problem with most of the real estate brands in India has been that these perceived customers’ viewpoint as unreasonable. They maintain that consumers are only aware of a limited information about a brand while they are thinking about making decisions. This is a myopic view of the brand and the market and huge flaw in a developer.
It is true that branding is always intangible and can’t be measured in absolute terms. But in a business where the large universe of the companies is not listed and even debt is not reported on the books, no one is bothered about perception and the brand.
The slowdown and the slow appreciation of property in the past few years, nevertheless, changed the market dynamics completely. Some of the larger developers by the market size, who looked so good till the time their investors were getting the ROI, were suddenly exposed to an altogether new reality of market backlash.
Many other once-leading brands like Jaypee, Unitech, Amrapali, HDIL, DB Realty, Parsvnath, Ackruti simply did not know how to keep their house in order. Real estate is no more a game of investors that is driven by ROI cycles.That bubble has already burst. What regulations like RERA could not do for the market, the networking of buyers through social media did that with a bang.
What defines a leader
Several leading real estate brands till a few years back are today struggling to find a place among the top 10. Reason: while it takes years to build a brand, a dent over brand reputation can instantly wash off the credibility.
The leading brands, however, have more or less been witness to consistent or better top line in the past seven years. This is despite the fact that the past seven years have been the most challenging times for the business for the sector at large.
Brand leaders like Sobha Limited, Embassy Group, Prestige Group, Brigade Group, Puravankara Limited are firmly footed in the performing markets where the consumer grievances are relatively much lesser. These are the developers that have, by and large, avoided any lasting dent on their respective brands.
The leading brands have also got ease of funding at the most competitive rates at a time when the large universe of the developers are struggling for the funds.
Size or top fiscal performance alone is no guarantee of brand leadership. A top line of around Rs 1800 crore to Rs 2500 crore with balanced debt-equity ratio and lower cost of borrowing looks more credible than the over-leveraged balance sheets with much higher sales volume.
Moreover, the delivery track record of say around five to ten million square feet with timelines met and consumers satisfied is adding more credibility to the developer than unrealistic delivery volumes where projects are mostly delayed and satisfaction to the buyers is constantly denied.
Rather than a vast geographical footprint, it is the performance in the given local market that defines a brand. There are many credible brands that have limited footprint but are doing reasonably well, for example Ashiana Housing or ABA Corp in North India, Sunteck Realty in West India and Ambuja Neotia in East India. It is the controlled launch-to-delivery cycle that commands brand premium and trust. Thus, companies that would not focus on consumer experience would script their own brand disaster.
No sector can perform well without having credible and established players. As the sector moves towards a regulated and organised era, it is the quality and delivery assurance that customers need the most and brand- conscious developers will be the ones providing it. — Abhinav Joshi, Head of Research, CBRE, India
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