Are Plotted Land Development Projects Flavour Of The Season?

The turn of the New Year marks the beginning of the end of fiscal year 2017-18. In a dynamic industry such as real estate, trends keep changing, and, this time, the growing interest among the real-estate developers in the plotted land development project market looks to be the flavour of the season. The plotted land usurps the erstwhile concentration on luxury apartment complexes and the likes.

Real estate bigwigs such as Shriram Properties and Infrastructure Private Ltd. and Tata Housing Development Co. Ltd are also part of the gradient in the curve. Several perks are boosting this trend in the real-estate spectrum, such as:

‒ Plots sale faster than apartments

‒ Better demand-supply equation generating better influx of finance

‒ Quicker monetisation

‒ Lesser development time than large high-rise residential projects

‒ Limited risks in executing the development plan

‒ Lesser risks of the area around the real-estate not flourishing, which takes down the demand of apartment and villa housing projects

‒ Easier to exit from an investment than possible in a housing project which stretches for a long time

‒ Faster approvals and quicker internal rate of return for developers
Besides hometown Bengaluru, Shriram Properties is also planning a couple of projects more in Chennai and one each in the Coimbatore and Chennai prime areas. The firm intends on compartmentalising this as a separate vertical as opposed to concentrating their 100 per cent on the micro-markets like their competitors and a lot of small-time realtors. They are keen on entering development agreements with land owners where buying out the land is not an option.

Another name that keep surfacing when it comes to the litany of small plot real-estate development drivers are the House of Hiranandani. HOH, as opposed to Shriram properties, is concentrating on their share of the small housing plot market by launching a separate brand, called Loftline. Loftline has so far, fetched booming business for HOH with 4.28-acre project in the quickly developing urban township of Thaiyur, Chennai. Loftline advertises lucrative, aspirational, small-housing projects and no less than 66 of them are currently on sale in the budget of Rs 25 lakh and above. As cited in media reports, company Vice-President of Sales and Marketing Prashant Mirkar projects that the enterprise can expect Loftline to account for at least 20 per cent of their revenue.
The evolving trend seems to have come as a boon for the real estate developers who have been aligning with the changes imposed by the real estate law.

Majority of the developers, big and small included, saw the market dry up and the pipeline get clogged for prospective projects, in the ensuing bedlam. The quarter may see real estate developers racing to deliver still-born projects to fruition, provided they follow Tata Housing’s example and develop on a need-to-execute basis, one project at a time, which just might do the trick.