All Indian Real Estate Needs is Faith!

To explain this, we are using the 'butting into traffic' example. 

Sometimes, the most complicated decisions in life are made completely simple by little things that happen around us all the time. What you see in this picture is one such every day situation but there is a story lurking in the depths of that image. We will unearth the moral for you soon.

For now, let us get to a couple of more serious questions.

What are the problems that Indian real estate builders are facing?

#1. Faith - If someone built a 26 floor residential tower in upmarket Mumbai or Bangalore, the next guy will do the same, give or take 2 floors. If someone built a shopping mall spanning 1 million Sq ft, the next guy will gun for the adjacent plot of land, to build one that is 1.2 million Sq ft. If developer X builds a luxury residential tower with the works on EM Bypass in Kolkata, developer Y will only take the luxury theme one notch higher. This will happen till the model fails and results in some very unhappy people in the board room of some 'nationalised' bank discussing that dreaded three letter word, NPA! Indians (some of whom have become real estate builders too) take the 'if it works, flog it' principle a little too far. We are like that, so forgive us world.

#2. Faith - In the years we have spent around real estate builders in India, we have never seen something called a price calculation. What we are trying to say is this;

Cost of Land = A
Cost of Design and Approvals = B
Cost of Construction = C
Marketing and Branding Costs = D
Costs that my mom in law should never know about = E
Profits that I want = F (What a coincidence!)

Thus, Cost Per Sq Ft I want to sell at = A+B+C+D+E+F

Instead, in India, we follow this method;

How much is Developer X selling for in the neighbourhood?
How much is Developer Y selling for in the neighbourhood?

Okay, so we, Developer Z will sell at a price higher than X and Y, because our quality is better and our brand is bigger. We can also assure you that 90% of all the real estate builders in India don't know what their actual project cost is. Even after it is completed! It is quite complicated in reality. At this point, we would want to quickly remind you that humans have put a man on the moon decades ago. Thank you.

#3. Faith - Have you ever seen a real estate advertisement? How stupid of us to ask you that. Please don't buy us that beer next time. If you cover up the project name and the builder logo in any Indian real estate advertisement, there is no way in the world that you can tell one apart from the other. Even the darn building elevations have started to look the same. This is mostly because the Indian real estate builder has zero faith in himself or his vision. Because it is not his vision in the first place. It is someone else's. His advertisement and branding, come from an ad agency that is just about to run out of fresh creative ideas for selling real estate. Don't blame them. We know agencies that specialise in producing real estate brochures in 12 hours flat to meet the client's realty expo deadline. There is such a market because faithless Indian real estate builders are paying for a job to be done in 12 hours. Can you imagine their commitment?

Back to that picture above, you will notice that to the left our car, there is a traffic jam for as far as you can see. An intelligent and sensitive human would wait for a gap in the main traffic and gently ease in his vehicle to join the mainstream. Everyone is slow anyway in a traffic jam. But the cab in the rear view mirror and cars behind it are honking their back sides off because we are being nice guys. They want us to butt into the traffic, inconvenience and p*** off a lot of other motorists just to be ahead by one car length! That is the kind of pressure our peers and their actions have on us. It can get compelling. But it is not always the right thing to do.

Dear real estate builder. Don't take all that pain just to be ahead by one car length. You know what we are saying? Get some faith into what you do. Play for yourself. Understand your costs. Know what you want to build and for who. Ever thought of Bazaar Malls? Ever tried your hands at affordable housing? Or REAL Green Buildings? There are opportunities there. And you know what? Those streets are abnormally quiet and sans traffic.

Cheers!