Traditionally, Real Estate in India has been a hyper-local business. This geographical constriction, amongst other reasons, can essentially be attributed to 3 factors:
- State-specific laws
- Control issues
- Tastes and preferences of buyers
Since real estate is a state subject. Every state has its own set of authorities and governance laws. Especially keeping into consideration the multitude of approvals required, which need liaison activities with several Government departments, functioning across several jurisdictions requires significant bandwidth.
Those of us who have been in the real estate business for a long understand how much of a hands-on approach and unwavering focus is required for all facets of operations in every single project. Spreading one-self over several geographies, therefore, requires the organization to be completely driven by systems and processes with operations stream-lined to perfection – this obviously is easier said than done.
Tastes and preferences of buyers
India being a vast country, as is the case with the plethora of languages and dialects which vary across small regions, there are subtle differences that tend to emerge in the product requirements. Considering housing is such a personal product driven by individual aspirations, this factor gets accentuated across different regions. Therefore, the art of understanding customer requirements becomes key.
With this backdrop, the ability to transcend across boundaries, that too international, is fraught with several challenges.
However, with the entire world being reduced to a Global village, and the timing being ripe with international interest in the emerging Indian market, successful navigation of the challenges above can lead to several advantages for everyone involved. Nonetheless, only very serious international developers with long terms plans and deep capacities are in a position to take on the challenges outlined above.
Especially for the buyers, there is a significant value addition that an International touch can bring about. With the world getting more and more connected and international travel for leisure or work becoming absolutely commonplace, people have been exposed to global standards of living, and there is no reason for them to expect anything less in their own homes.
So what constitutes a truly Global product, and what associated benefits/advantages can the buyers expect?
Trust: One of the biggest challenges that plague the Indian real estate market is the growing trust deficit between the buyers and developers. A large contingent of buyers have faced deep issues with regard to the timely delivery of their dream homes and have had to wrestle with contentious quality issues. This, rightfully so, has eroded confidence and trust that buyers have with most developers in India. Instead, investing with a corporatized developer who has access to Global institutional finance provides much-needed protection. A multinational brand which has diversified business interests, a known legacy, and a successful track record in real estate development would not just ensure that buyer interests are kept at the forefront, but also have the ability to actually deliver on all these fronts.
Quality: Institutional developers that transverse international borders for business are typically governed with stringent systems and processes. Especially since these operations are not run by any single individual but collective decision making by a team who are the custodians of the all-important international brand, there can be absolutely no cutting corners during the construction stage. The inherent focus of international developers is on the long-term horizon and their own brand building. Therefore the question of making a quick profit through any compromise does not even arise.
International design: Organized real estate development in India is still at a very nascent stage since it’s been around only for a few decades. Globally, this phenomenon has been around for centuries, and there are immense learnings that can be reproduced after adjusting for local Indian dynamics. As they say, the devil always lies in the detail. International design by way of being ahead on the learning curve can help leapfrog with regard to the design evolution. To give examples of some of the small things (which make all the difference), how many projects currently include a loading/unloading bay and other sundry provisions to make moving-in/moving-out a hassle-free experience for the residents? Or how many projects include not just the toilet but also shower cubicles and lockers for domestic help in the public washrooms such that the residents can keep full-time help without having to invest in a domestic help room? These are just some of the experiences garnered over time and thereby become a part of the standard product design. A word of caution, though, just getting a concept design from a foreign architect is not enough to address this issue. It is the detailed design stage where these value-additions can really be brought in.
Corporate Governance: RERA has provided buyers with much-needed protection from unscrupulous developers. Everyone agrees that this has definitely been a step in the right direction, and regulators go a long way in making the industry more organized and bring back buyer-confidence. On the other hand, when it comes to international developers, apart from RERA, there is a whole host of other international laws as well, which make the operating environment even more stringent. Corporate governance takes center stage, and therefore, any promises made to buyers are after very careful deliberation, and once made, are honored irrespective of the cost. With this, the focus comes back on the actual product – which is the brick and mortar real estate being delivered – and not on packaging it as a financial product decorated with various sales ‘schemes’ as has been an observed practice in recent times.