A Merc free with the apartment, time to get both?

Hi,

Things just don’t seem to get any better for the sector. I happened to drive along Gurgaon’s largely vacant growth corridors on a weekend. If number of “Stalls” of intermediaries is anything to go by, seems the activity is back, though there weren’t many people under those “tents” which are a peculiarity of NCR. Price discovery, discounts, foreign trips, GST waivers & yes a Mercedes with apartments purchases are just a few ways to get people to notice the property. We are still collating the right data but we believe the project visits and enquiries have dropped post RERA & GST. Not that it doesn’t impact other cities, they seem to be faring relatively better. Several months post RERA implementation, still only handful of portals work, RERA numbers are awaited and consumer seems to be pushing for resolution of his dispute. In UP and Haryana even the governments of the day seem to be engaging along with consumers in their continuous struggle to get their homes.
In the midst of it all propstory.com wears a new skin now as we are overhauling the surfing experience. With every change there are a bunch of issues that take time to stabilise so is the case with us. However, we hope you will derive the best readership experience in real estate with us.

It is raining discounts & offers in realty market

Supertech scarlet suites ,sector 68

Hi,

We hardly hear of launches in the residential market these days and this trend itself may pave for recovery in the markets, when would that happen is anyone’s guess. Among the many views, news and reviews we keep hearing about resumption of an uptrend in the real estate market we are also caught up in the melee of offers, discounts & property fests. The impact of these isn’t captured by any property analyst as they comment on the sticker price only.
Propstory partnered leading players in the Bangalore market recently and delivered excellent results in a time bound manner. That said we also believe these tactical events are necessary when the customer has been on sidelines for a very long time and it would take him more than convincing to make a home purchase.
We have increased our coverage of properties significantly and here are some notes for your perusal –

3. Pune – Senior living at Gagan NuLifePisoli area note

And one of our analysts penned down “Why it makes sense to sell an old house today” from her recent experiences.

Mumbai’s tryst with rains…continues

Mahindra Aura

Hi,

Yesterday was yet another unfortunate day in Mumbai’s history for owning up to a poor infrastructure network and limited connectivity to quickly transport the millions of those who have made this city their home. These days it is difficult to find a clear winner among our country’s metropolitan areas as to which is the one that offers great living quality. During my recent visits to Hyderabad, which I personally considered to offer a great quality of living, traffic jams, overflowing sewage drains and garbage dumps on empty plots did make me rethink my stance. I guess on relative basis both Hyderabad and Pune score over others, but then there are economic challenges that these cities suffer from in comparison to others.
RERA introduction is a month old event now, yet the customer isn’t back in the market as far as our interactions with developers suggest. There is definitely a positive outlook but then not everyone has “Ready to move in” properties to offer which seem to be the buzz word today. We have tried our best to expand our coverage in recent days and also set up a Youtube channel to carry video/ infotainment content on real estate – https://www.youtube.com/channel/UCSmJZAwz95J5SxUEldv5yQQ
Some notes for your reference (before we completely overhaul our current site to improve its experience) –
2. Virar (Mumbai) and upcoming Shapoorji development – https://propstory.com/virar-the-promising-yet-underappreciated-mumbai-suburb/

International Land Developers – Emerging Realty Firm At NCR

Ready towers at ILD Greens, Sector 37C, Gurgaon

International Land Developers, more commonly known as ILD, is an upcoming real estate development firm based in Gurgaon in the National Capital Region. The young firm has already developed and delivered Industrial, Office, Retail and Residential addresses at very strategic locations within Gurgaon since the early 1990’s.

In our interaction with the Mr. Alimuddin Rafi Ahmed, Chairman-ILD we tried to get the essence of choosing the right location for planning urban development and the factors that he would consider before conceiving a project. Mr. Ahmed explained the importance of upcoming infrastructure, social amenities in line with the growing population needs and broad economic growth agenda.

Q-How did you decide on starting a real estate development company?

A-We started our real estate business by developing an Industrial Park within Gurgaon District in early 1990’s at a time when NH-8 used to be a single lane road to Jaipur. The development of the Highway and ease of approvals promoted many Indian manufacturers to set up base in Gurgaon. Gradually, as the development plans for Gurgaon were announced, we moved our focus to developing a Commercial Development and eventually acquired residentiallands in Sector 37 C, near Hero Honda Chowk and Sohna, South Gurgaon.

Q-How did you chose on the location for the Industrial park or the Commercial Project?

A- We have been quite particular about the access to our projects and we would look at the distance to the closest Highway. Most of our developments are and would be quite accessible by roads or other modes of transport including metro lines.

The Industrial Project is located near a village called Binola with direct access on NH-8 and is about 2 KM’s from IMT Manesar (a massive Industrial development by HSIDC). The plan of widening the highway was quite ambitious and the pace at which foreign companies were setting up base in Gurgaon encouraged me to undertake the development.

For ILD Trade Centre, I was quite convinced with the Sohna Road as a future commercial hub because of the direct access from NH-8. The only other micro-market with straight access to NH-8 was MG Road, which became quite successful and saw rapid real estate development. At present Sohna Road is the largest micro-market within Gurgaon in terms of Commercial Space.

ILD Trade Centre commercial project at Sohna Road, Gurgaon
ILD Trade Centre at Sohna Road, Gurgaon
ILD Trade Centre Entrance Plaza
ILD Trade Centre Entrance Plaza

Q- What was the rationale behind choosing Sector 37C for residential development?

A-Sector 37C was the first sector in New Gurgaon under the Masterplan 2021 that was published around 2008-09. The proximity to existing residential sectors was the key reason to choose this location for our project. It is conveniently located between NH-8 and the upcoming Dwarka Expressway making it quite accessible from rest of Gurgaon and Delhi

We currently have over 3 million Sq Ft of Residential Development with a mix of High-rise Apartments, Plotted Development, Independent Floors and Neighborhood Commercial Complex in this micro-market.

The developments on Hero Honda Chowk like the 8-lane flyover and the signal free underpass would open up much faster connectivity to rest of Gurgaon.

ILD-Greens-at-Sector-37C, Completed Tower
ILD-Greens-at-Sector-37C, Completed Tower
ILD Greens & Grand Under construction
ILD Greens & Grand Under construction
Completed Structures of Residential Towers At Sector 37C
Completed Structures of Residential Towers At Sector 37C

Q- What is the development potential of Sohna, South Gurgaon as a residential market?

A-  Sohna as a Master-plan was the latest extension to Gurgaon which was announced in 2014. With our experience of developing ILD Trade Centre on Sohna Road, we had witnessed the potential this micro-market offered. We were quite convinced on the location because of its proximity to the developed sectors of Gurgaon on Sohna Road, Golf Course Extension Road and Southern Peripheral Road.

The area has numerous educational institutions such as GD Goenka World School, KR Mangalam University, DPS, Apeejay Univeristy, J K Business School and many more, which provides an unmatched existing social infrastructure for residential development in the entire National Capital Region.

We are developing 3 million square feet of High Rise apartments in Sohna spread across 37 Acres within the first residential sectors of Sohna.

Q – How do you see the Gurgaon residential market over the next few years?

  1. We are fairly bullish on prospects of Gurgaon as a residential market. It is a city that is growing rapidly and has a global and corporate footprint. Easy connectivity to international airport, metro connectivity with Delhi and highway connectivity to major cities of North India, make it an attractive market for residential investments. Further the establishment of several Fortune 500 firms including Google, MicroSoft, CitiBank among others has brought with it a rich cosmopolitan culture to the city, similar to Mumbai or Bangalore. There are major infrastructure projects currently underway at Gurgaon and these will make the city even more desirable. Areas with current and upcoming connectivity will see good investment prospects.

Are we successfully through July 31st?

Hi,

So we are through July 31st, set out as the deadline of sorts by the Center for respective states to adopt RERA and developers to conform to guidelines under registration. Here we are in August 2017 states such as Telangana don’t even have their versions of the Act and few others notified the Act only in the last few days. This left the developers with little time to register their projects online, talking of which many states didn’t even have a portal for project registrations. We spoke to few developers on the eve of July 31st and captured their plight – https://propstory.com/karnataka-rera-deadline-of-july-31-to-register-projects-too-harsh-on-developers/
We also went covering projects at a quick pace to publish information on them before the said date. Some of the featured projects include –

How the sales incentives in real estate take the wind away from marketing

How sales and marketing conflict in real estate hurts the development firms

It was nearly an year since we started our portal, which away from the humdrum of classifieds focused on real estate brand building and marketing, that we got a call from a reader interested in a property at Hyderabad. He was influenced by one of the very informative posts we had prepared on an upcoming project. We were very clear in our communication to him that we weren’t brokers. He had a long conversation with us and that whole day he went scouting for properties and kept calling us. We decided to try out something new. We called up the sales head of the property firm and discussed the case with him. He immediately extended a reasonably good discount to the customer.

We informed this reader about our interaction with the company. What happened next? None of us knew for weeks. I called up the reader and asked him about the decision he took. He told me that he bought the flat the very next day and was highly grateful for our help. I called up the sales head and he was surprised too, since he wasn’t aware of the closure. He later checked his own MIS and found the client sale was recorded under a leading Online Broker’s name. Now started an investigation into what really transpired here. It was very evident to us. The sales incentives are too misaligned in this sector. Most of the times what really happens at the project sales offices isn’t what we hear at head office. It all starts from the intense sales focus in real estate. In today’s bad market this sales driven industry is facing an even bigger question. “Is poor marketing resulting in poor sales?”. Ask a marketing head of any firm and he/ she has a different story to tell. Marketing departments are found complaining that there is intense pressure to achieve sales numbers because construction till the advent of RERA regime was seen secondary by many players. RERA now puts a bigger onus on project construction and timely delivery, thus the incumbents can not wait for high sales number to commence execution.

Chicken and Egg problem? Marketing vs Sales in real estate
Chicken and Egg problem? Marketing vs Sales in real estate

The above trend reminds me of my first employment ie private banking/wealth management in leading international banks. Banks were so enamored with third party fee income that they pushed all those supposedly managing wealth of clients to just keep selling investments like soaps. And the wealth managers would have a new suggestion every other month. A serious back lash hit the industry when clients were found on wrong footing during the 2008 crisis. Some foreign banks put in place sales process audits etc to check malpractice but to little avail. Mis-selling continues unabated in wealth management.

Are real estate companies creating In House Brokers?

How is it that two critical functions ie real estate sales and marketing aren’t working together. The latter department is doing its bit through out of home media, prints and on-line activities. This leads to generation of inquiries. Based on brand popularity and market conditions the amount of leads can vary tremendously. Once an inquiry enters the lead management system, the pre-sales follows up with the client to judge his interest in the property. If the LEAD is qualified ie the person who expressed interest is genuine the LEAD enters the sales channel. Many firms are still to create effective pre-sales process or instead pass the lead directly in the sales channel. The latter processes lead to poorer follow ups and leads going stale most of the times.

Sales-Vs-marketeers in real estate
Sales-Vs-marketeers

Now let’s understand what is happening at the project sales office. Suppose the QUALIFIED LEAD walks in for a site visit and shows further interest in the property to an extent he/ she wants to buy it off, this is where the conflicts begin. Most real estate companies link incentives of sales professionals to closures, a closure can be a direct or indirect ie through involvement of an intermediary (or BROKER). The incentive for closing a sale directly for firm’s employee may be higher, however the commensurate effort required is also more. The above doesn’t play out as simply.

Firstly in markets such as NCR, brokers have started a practice of pass back of commissions. Let’s say a broker gets a commission of 4 percent on a sale, he would incentivise the buyer through say half of this. Customers also act smart and use this route more often after having done their own diligence. Brokers and sales professionals of developers end up creating a good camaraderie over time. Now consider a scenario – a direct walk-in is referred to a broker by the sales professional, possible? Very much. This is exactly where the sales and marketing goals start to diverge in Indian real estate enviroment.

Will Sales and Marketing in Real Estate ever be on same page
Will Sales and Marketing in Real Estate ever be on same page

The real estate company is looking at most sales by spending the least, this is what marketing departments are trying to achieve. Burden of paying a brokerage is an additional cost to the company. However, developers would typically not want to annoy the broker lobby and would honor a sale any which ways. This practice or the inability to control it makes life tough for us and for the in house marketing teams. We along with them toil hard to generate good inquiries.

So what will it take to change the above practice and align everyone’s interest.

The first and foremost requirement is that of real estate firms to change the mindset from sales to customer service. To an extent, advent of RERA will help achieve this. Companies will be investing more resources in correct and adequate marketing.

Secondly, the realty firms need to align the incentive structure better. For that they need to start treating sales professionals like they would treat any other employee in the firm. Pay him well, link his performance to that of company and his own, train him well and groom him well. Why must they be treated like brokers? By linking sales recorded under his code to his bonus. Instead look at how much did he save for you by making a direct sale and acknowledge better. I have often heard from leading realty firms that they don’t have good staff. The harsher truth is that this industry doesn’t attract good talent for multiple reasons – not so lucrative salaries, too much control and intervention by the owners (As most firms are privately held), poorer organisation structures and too much orientation to sales.

Stay away from differently pricing the same product. Like they say in NCR the brokers are at times given special “deals” to offload inventory. So a client hears different prices depending on who he interacts with. Broker may have a favorably sounding deal for the customer. This results in customer transacting through the broker instead of the company. Such practice will demotivate the company’s own sales professional and he would willingly let that opportunity go to the broker.

We recently received feedback from a client of ours. We were quite happy with the response to the campaign we ran for them. We also heard of massive turn up of walk ins and few closures. However the numbers didn’t sound that encouraging when it came to closures. Needless to say that the client was still comfortable with our work, but we weren’t. So we decided to conduct a short survey on leads generated through us. We called up about 100 or so of 1000 enquiries and found at least three cases of people having already bought the apartment. Several more told us they are still waiting for the developers to call them up. Our hunch was proven right, yet for a sales focused promoter our hunch wasn’t enough to make him believe otherwise. It has been an uphill task for us to convince the company’s management, but gradually the tide is turning.

The sales vs marketing conundrum, Source – business2community.com

The sales funnel gets sharply narrow as we move along. It is the job of marketing to one enhance the size of the funnel and make it more useful by right targeting. But the marketing alone can not decipher the impact, it is the sales that need to provide correct and timely feedback. However that is not happening in our sector. The cost of service/ product is so high that incentives around a good sale are very lucrative.

This pushes the poorly paid and less trained sales professional to get into some sort of arrangement either with a broker or to find other ways to enhance his own payout. In all this marketing departments do not get the credit they deserve. This can not continue in the post demonetisation and RERA times. To get the best ROI, companies will have to control the sales and marketing well. Margins are getting squeezed which means the less you pay as referral fee the better you are. For this we all need to go back to the drawing board, before even sales and marketing it is the brand and its recall that will count. To get to that stage is a long and painful process, only the far sighted serious real estate firms will understand that others may continue to create an army of in house BROKERS.