New real estate developers enter sector
Despite economic slowdown, real estate margins continue to be profitable, believe industry experts. Many believe that the sector will further improve following the elections next year.
Entry of new developers
Several companies from different sectors have been entering the sector regardless of the weak market sentiment. Since 2011, nearly 20 small companies have entered the realty market while several more are planning to penetrate soon. For instance, a joint venture of Dabur’s promoters and US-based venture capital fund GSC, named Burman GSC, is planning to enter the segment.
Action Group’s Microtek Infrastructure, M3M, BRYS, KV Developers, Lotus Greens, etc. are few other firms trying to check their luck in real estate. Most of the firms have already made plans for developing projects in Delhi-NCR and are even planning to expand to other areas in future.
BRYS Group has announced its first project ‘BRYS BUZZ’ on Noida expressway. The interiors would be designed by Italy’s Tonino Lamborghini CASA. It has also bought land for BRYS BOLD & BRYS BOSS luxury projects, according to its website.
Microtek, with a land bank of 500 acres in the NCR, is coming up with a luxury housing project in Gurgaon. It has also made plans to launch about eight more residential and commercial projects in the luxury/ultra-luxury segment. The company, since past 25 years, has been converting agricultural properties to licensed ones before selling these to builders.
Landowners turn developers
Not only companies are expressing interest, but even many landowners, with huge chunks of land, have become interested in becoming real estate developers.
Firms like Microtek, M3M, Lotus Greens, etc had huge land banks even before getting into the realty business. K V Developers (KVD), the real estate arm of the K V group, has been into mint business so far. Recently, it has announced its first project in Greater Noida. M3M has been developing M3M Golf Estate in Gurgaon, which is currently under construction.
Not many to compete
The number of newly entered real estate companies is not significant when compared to the existing number of firms in the segment, said Ashutosh Limaye, head, research and real estate intelligence services, Jones Lang LaSalle (JLL). Even the number of projects they will be launching or developing would be small against the total launches in India. The new entrants would generally prefer to launch projects which would involve less risk, observing the prevailing market sentiments. The younger generation aspiring for new growth avenues forms the major target to these companies.
The recent data released by the National Housing Bank (NHB) through its RESIDEX also indicates that there will be a revival in the realty sector. Residential prices in 12 cities, including Mumbai, Hyderabad and Chennai, recorded an increase in July-September 2013 quarter against the previous quarter.
